There are several different types of takeover which are classified based on legal context and business context. From legal perspective, takeover is of two types. In the context of business, takeover is of three types.

LEGAL CONTEXT

From legal perspective, takeover is of two types:

'Friendly Takeover' - the company bidding will approach the directors of the other company to discuss and agree an offer before proposing it to the shareholders of that company.

The bidding company will also have an opportunity to look at the accounts of the business they want to buy - a process known as due diligence.

'Hostile Takeover' - the company bidding has their offer rejected or does not approach the board of the company they wish to buy before making an offer to shareholders.

This also means they will not have access to private information about the company - increasing the risk of the takeover. Banks are usually more cautious about lending money for hostile takeovers.

'Reverse Takeover' - the final common type of takeover is the reverse takeover. This happens when a private (not traded on the stock market) company buys a publicly-traded company as a means of acquiring public status without having to list itself.

BUSINESS CONTEXT

In the context of business, takeover is of three types:

Horizontal Takeover: Takeover of one company by another company in the same industry. The main purpose behind this kind of takeover is achieving the economies of scale or increasing the market share. E.g. takeover of Henkel by Jyothy Laboratories, Patni Computers by iGate.

Vertical takeover: Takeover by one company of its suppliers or customers. The former is known as Backward integration and latter is known as Forward integration. E.g. takeover of Sona Steerings Ltd. By Maruti Udyog Ltd

Conglomerate takeover: Takeover of one company by another company operating in totally different industries. The main purpose of this kind of takeover is diversification.