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The process of one firm acquiring the other, also known as acquisition. As opposed to the merger which is an outcome of ‘mutual agreement’, takeovers are ‘hostile’ moves.
Takeovers may be classified into three broad categories:
(i) Horizontal takeovers involve firms which are direct competitors in the same market;
(ii) Vertical takeovers involve the firms having supplier-customer relationship; and
(iii) Conglomerate takeovers involve the firms operating in unrelated markets but intend diversification.