The Motivation And Performance Of Hostile Takeover

With the vigorous development of China’s capital market,hostile takeover have gradually increased,causing widespread debate.Hostile takeover is not good or evil in values,but it is conducive to accelerating the integration of resources.However,this type of acquisition is not good in China,and most of them end in failure.The research is mainly on how to defend.There is little concern about the motivation and implementation effect of the merger and acquisition.How to conduct hostile acquisitions by Chinese companies has become an urgent problem to be solved.This article studies a case of Kuka Home acquiring Sleemon,based on the logic chain of motivation-process-effect.The study found that: Kuka’s decision was driven by the economic benefits of access to resources,and the management’s factors such as preference risk,and excellent performance.In addition,different ideas of the two companies also led to hostile acquisitions.Kuka’s main way is to participate in in the bailout plan.Although it controlled a large number of Sleemon’s stocks as expected,the legality of the method is debatable.It is also contrary to business ethics and the hostility is very strong.The reason for Kuka’s failure is that Sleemon has carried out effective defense.The actual controller used the power of social capital to modify Kuka’s attacks by modifying the regulations and introducing the white knight.The huge public pressure also forced the management to stop hostile acquisitions.Public opinion questioned financial risks,merger intentions,and so on.Kuka Home,whose governance structure was defective,failed to respond positively.The stock price of Kuka Home continued to decline during the hostile takeover,the wealth of shareholders was lost,the management of Kuka Home made a concession,and the market trust was regained.The share price recovered after the hostile takeover was terminated.By analyzing this special hostile takeover case,this article provides experience for other companies to conduct hostile takeovers.Due to the particularity and uneasy substitution of China’s social capital,companies conduct hostile takeovers should as much as possible to reduce the hostile awareness of the target company’s stakeholders.Too eager ways are counterproductive.Management and the market have different risk preferences,so companies should conduct more Q&A with the market on the online platform,and actively disclose information when making risk decisions to gain market trust.At the same time,it also found that the regulatory authorities should improve the rules of the bailout plan in a timely manner,maintain a fair and just environment in the acquisition market.