A more thorough explanation:

A corporate takeover is when one party gains control of a corporation from another party. There are two types of corporate takeovers: hostile and friendly. In a hostile takeover, the management of the company being taken over does not want to be taken over. In a friendly takeover, the management of the company being taken over agrees to the takeover.

When a party obtains more than 5% of a corporation's outstanding stock, they must file a report with the Securities Exchange Commission (SEC) stating whether they intend to initiate a takeover or not. If they do intend to initiate a takeover, they will release a tender offer to purchase shares from shareholders. This offer is typically above market value to incentivize shareholders to sell. The success of the takeover depends on whether enough shareholders sell their shares.

Takeovers happen for many reasons, including industry diversification, corporate raider attempts, and removal of competition. However, all takeover attempts, hostile or not, must receive clearance from the FTC to ensure that a monopoly will not result.

• Example 1: Company A wants to take over Company B. Company A releases a tender offer to purchase shares from Company B's shareholders. If enough shareholders sell their shares, Company A gains control of Company B.
• Example 2: Company C wants to merge with Company D. Company C and Company D's management agree to the merger, and a shareholder vote is held to determine whether to accept the terms of the merger or not.

These examples illustrate the two types of corporate takeovers: hostile and friendly. In Example 1, Company A is initiating a hostile takeover because Company B's management does not want to be taken over. In Example 2, Company C and Company D are agreeing to a friendly takeover through a merger.