This is a research assignment regarding the analysis of a friendly takeover example and a hostile takeover example in the year 2010 to 2011. As for the friendly takeover acquisition, it is still in process with a vertical business combination of building materials supper and peat moss distributor. As for the hostile takeover acquisition, this is a Horizontal Business Combination of two mineral mining companies.
Friendly Takeover Example –Vertical business combination
IKO Enterprises Ltd. acquiring Sun Gro Horticulture Inc.
Acquirer – IKO Enterprises Ltd.
IKO is a global leader in the manufacture and supply of asphaltic and bituminous waterproofing products. Group head quarters are in Alberta, Canada, with production carried out at plants throughout North America and Europe. The Company’s branded materials are specified for house building, commercial property and engineering structures in many countries worldwide. Acquiree – Sun Gro Horticulture Inc. (TSX:GRO)
Sun Gro is the largest producer of peat in North America and the largest distributor of peat moss and peat-based growing media products to the North American professional plant growers market. “The company's North America-wide production network now comprises 12 Canadian plants and 13 US plants.” Acquisition Details
Acquisition Bid Announced Date – Sun Gro. announced it has entered into a support agreement with KIO on January 17, 2011. The formal offer date is on January 25, 2011, and deadline is on March 7, 2011. Acquisition Cost – About $147 million.
Controlling Percentage of Acquirer–IKO holds a nearly 20% stake in Sun Gro. Response of Acquiree – Friendly Takeover
The Sun Gro board has unanimously determined that the offer is fair to their shareholders and is in the best interests of Sun Gro and its shareholders. Expected Benefits in Acquisition
The proposed sale of Sun Gro to IKO in September 2010 was because Sun Gro wanted to enhance shareholder value. IKO...