What is an Anti-Takeover Statute?

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

How Does an Anti-Takeover Statute Work?

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 Does an Anti-Takeover Statute Matter?

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.