Legal Definitions - crown jewel

Definition: A company's most valuable asset, especially when the company is at risk of being taken over by another company. To prevent a hostile takeover, the target company may sell its crown jewel to a third party, making it less attractive to the suitor.

Example: If a company's crown jewel is its patent portfolio, it may sell some of its patents to another company to reduce its value to the potential acquirer. This makes the target company less attractive to the suitor, who may then abandon the takeover attempt.

Explanation: The term "crown jewel" refers to a company's most valuable asset, which is often the key to its success. In the event of a hostile takeover, the target company may sell its crown jewel to a third party to reduce its value to the suitor. This makes the target company less attractive to the suitor, who may then abandon the takeover attempt. The example illustrates how a company may use its crown jewel to protect itself from a hostile takeover.