Friendly Takeover

A term that refers to a company’s whose management and board of directors agrees to a merger or acquisition by another company. A publicly traded company would require shareholder approval for the decision to be final.

Buffett usually buys privately owned companies and many owners are quite happy to sell to him. This is similar to a friendly takeover. Hostile takeovers are usually more costly and Buffett declares that he does not want to take over a company via such means.