Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Enterprise growth Strategies

Question:

Select the correct option related to hostile acquisition.

A. Acquisition under friendly term

B. Entire process is done by force

C. A public company takes over private company

D. Purchasing company becomes a subsidiary of purchased company

E. Smaller company is either driven to such a condition that it has no option but to say yes

Choose the correct answer from the options given below:

Options:

A and C only

C and D only

B and E only

D and E only

Correct Answer:

B and E only

Explanation:

The correct answer is option (3) - B and E only.

Hostile acquisition:  Here, as the name suggests, the entire process is done by force (B). The smaller company is either driven to such a condition that it has no option but to say yes (E) to the acquisition to save its skin or the bigger company just buys off all its share, thereby establishing majority and hence initiating the acquisition.