Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Anti-Takeover Statute

What it is:

An anti-takeover statute is a law designed to deter companies from launching hostile takeovers of other companies.

How it works (Example):

Anti-takeover statutes exist in some places in order to protect the autonomy and interests of companies incorporated in those states. Though their character differs from state to state, anti-takeover statutes either prohibit takeovers or set forth penalties against forcibly purchasing companies.

Why it Matters:

Anti-takeover statutes are a double-edged sword. Although these statutes prevent the detrimental consequences of hostile takeovers, they can also inhibit mutually profitable merger opportunities between companies.