DEFINITION of 'Predator'

In mergers and acquisitions, a company with sufficient financial means to easily bear the risks associated with acquiring other companies. Predators are considered to be the financially strong company in the merger or acquistion. The weaker acquisition targets are sometimes called "prey," because they can be snatched up by more powerful firms. Many firms fall somewhere in the middle of these extremes.


Although strategic acquisitions can be a great way to expand, there is considerable financial risk involved. Careful analysis must be performed to ensure that the acquiring company does not overpay for the target. In addition, considerable due diligence must be performed to ensure that there are no surprises lurking in the target company. Finally, it may take considerable financial capital to restructure and consolidate the two companies into one cohesive unit once the acquisition is complete.

  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Dissenters' Rights

    State legislation that allows shareholders of a corporation the ...
  3. Friendly Takeover

    A situation in which a target company's management and board ...
  4. Merger

    The combining of two or more companies, generally by offering ...
  5. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  6. Acquisition Premium

    The difference between the estimated real value of a company ...
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