defensive acquisition(redirected from Defensive Acquisitions)
An acquisition that a company makes in order to keep from being taken over. For example, if Company A may acquire a much smaller Company B, which will make Company A so large that any takeover will result in the acquirer running afoul of antitrust laws. A defensive acquisition most commonly applies to acquiring a company, but it may also involve acquiring a particular product that will make the company more difficult to take over. It is an example of an antitakeover measure.
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A firm or an asset purchased by a potential target of a takeover in order to make itself less desirable to raiders. For example, a target company might purchase another firm engaged in the same business as the raider in order to create an antitrust problem for the raider. See also raider, target company.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.