Definition
A compulsory acquisition right allows an acquirer who has obtained a high level of ownership (typically 90%+) following a tender offer to forcibly acquire the remaining minority shares at the offer price. The non-U.S. analog of the U.S. squeeze-out merger.
Common thresholds
- EU Takeover Directive — 90% (after the bid)
- UK Takeover Code — 90% of the shares to which the offer relates (Companies Act §979)
- Australia — 90%
Why it matters
Compulsory acquisition is the legal mechanism that lets the acquirer reach 100% in non-U.S. jurisdictions without an additional shareholder vote. It typically must be exercised within a defined window after the bid (3–6 months in most regimes).
Sell-out right
The flip side: minority holders who didn’t tender often have a sell-out right to require the acquirer to buy them at the offer price within the same window.