I just came across an interesting case: the takeover attempts at Commerzbank. It reminded me again of how hostile takeovers actually happen in practice. Many think this only happens in Hollywood movies, but it’s a very real business strategy.

When a company wants to buy a competitor and the management refuses, the game begins. That’s a hostile takeover. The buyer simply bypasses the management and tries to gain control through other means. This can happen in several ways.

The most common method is a takeover bid, also called a tender offer. The buyer offers shareholders a price above the market value and tries to acquire the majority of shares. Another approach is the so-called creeping takeover: buying shares quietly and gradually on the open market until enough is accumulated. Then they go public and try to influence. An interesting tactic is the proxy fight, where the attacker negotiates directly with the board and shareholders, aiming to replace the management at the next meeting.

What fascinates me is how the target companies defend themselves. The management has various tricks up their sleeve. There are the famous poison pills, which make the purchase so expensive or complicated that the attacker gives up. Sometimes they sell off their most valuable assets to reduce interest. Or they look for a white knight, another buyer who aligns with management.

In the Commerzbank case, we see exactly that: the Italian major bank UniCredit is attempting a hostile takeover, while Commerzbank is resisting. Who ultimately wins is still open, but given the broad distribution of shares, UniCredit seems to have the advantage.

Interestingly, something similar also happens in the crypto industry, especially when Bitcoin miners try to acquire competitors. New coins like Sponge V2 are less affected by this problem because they mainly focus on convincing investors. But the mechanics are similar: it’s about market share, synergy effects, and grabbing undervalued assets.