Squeeze-Out

A squeeze-out occurs when a majority shareholder forces minority shareholders to sell their shares, often in the context of a merger or acquisition. In many jurisdictions, once a shareholder obtains a certain percentage of ownership—typically around 90%—they can legally compel the remaining shareholders to sell their shares at a specified price. Squeeze-outs allow companies or investors to gain full control over a company and remove minority shareholders.

Example

A corporation that holds 95% of a target company's shares initiates a squeeze-out to acquire the remaining 5% from minority shareholders, completing its acquisition.