A company's change of control often occurs due to the selling of its shares, either in the open market or through a private transaction at an agreed price. This can also occur through a primary market route when additional shares or rights shares are allotted to, and paid for by, existing shareholders or outsider applicants.
This can also occur due to the conversion of a convertible portion of debentures or bonds, or any planned arrangement provided in an agreement for future transfer of shares.
A change of control may imply the sale or acquisition of the whole, or a substantially complete part, of all the assets of an entity due to a complete merger, demerger, restructuring, acquisitions transacted between any individuals and/or corporate entities, or any change in the ownership of more than 50 percent of the voting shares of the entity (in one or a series of related transactions).
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The acquisition of a controlling stake in a listed company is subject to various regulations of companies and listing agreements, disclosure requirements and rules of boards of security exchanges.
In some countries, senior executive employment contracts contain a change in control provision, which provides enhanced protection against arbitrary termination when a different owner takes over the management control of a company.