Creeping Acquisition

Creeping acquisition is a strategy in which an investor or acquiring company gradually accumulates shares of a target company over time through open market purchases — building a significant stake incrementally without making a formal public announcement or triggering the open offer obligations that apply to bulk acquisitions. By purchasing small quantities below the regulatory threshold that mandates disclosure and public announcement, the acquirer can quietly build a strategic position at lower average prices before the target company or other investors become aware of the accumulation. In India, SEBI's Substantial Acquisition of Shares and Takeovers Regulations (Takeover Code) require disclosure when holdings cross 5%, 10%, and 25% thresholds, and mandate a public open offer when an acquirer crosses 25% or acquires more than 5% in a single financial year beyond 25%. Creeping acquisition up to 5% per financial year is permitted for acquirers already holding between 25% and 75% without triggering an open offer. SEBI monitors trading patterns for evidence of coordinated creeping acquisition designed to circumvent takeover regulations.