What percentage of Mergers and Acquisitions transactions are typically hostile?

The assertion that typically less than 1% of mergers and acquisitions transactions are hostile reflects the reality of the M&A landscape. Hostile takeovers, where the acquiring company attempts to take control of a target company against the wishes of its management and board, are rare compared to the overall volume of M&A deals. Most acquisitions are negotiated amicably between the parties involved, as they tend to foster more stable and constructive outcomes for both the buyer and the seller.

Factors contributing to this phenomenon include the significant legal, financial, and reputational risks associated with hostile takeovers, which make them less attractive to potential acquirers. The preference for negotiated mergers allows both sides to reach an agreement that can lead to smoother integration processes post-acquisition, which is beneficial for long-term success. In essence, the dynamics of corporate governance and the aim for cooperative arrangements further explain why such a low percentage of transactions are classified as hostile.