Scorched-Earth Plan

A slang expression for a defensive tactic used by an unwilling corporate takeover target to make itself less attractive to a buyer.

Scorched-earth tactics include selling off assets or entering into long-term contractual commitments. A difficulty with such maneuvers is that they tend to be irreversible and may permanently harm the company. As a result, they tend to be used as a last resort in a takeover struggle.

Cross-references

Mergers and Acquisitions.