scorched-earth policy

Definition

A reaction to a takeover attempt that involves liquidating valuable assets and assuming liabilities in an effort to make the proposed takeover unattractive to the acquiring company.

Use this term in a sentence

You should try to make sure that you do not over do a scorched-earth policy and try to keep a cool head.

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They were trying to think of ideas to stop the threat of a takeover. They finally decided on a scorched-earth policy, and figured no one would want them then.

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The company adopted a scorched-earth policy when the news of the takeover hit, and within the quarter there were serious rumblings that the takeover might be canceled.

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