Acquisition is an action by one company taking control of another company. It is done when the acquiring company buys more than 50% share in the acquired one. In the corporate world, merger and acquisitions are done to grow big or scale up business.

There is slight difference between merger and acquisition. In the case of acquisition, the acquiring firm will have dominance and more of its persons will be appointed in the board of executive of the new entity. On the other hand, merger denotes merging of business by two identically sized entities to form another entity. (eg Arcelor Mittal).

Acquisitions can be of two types – friendly and hostile. In the first case, the acquired company’s owners give consent for the acquisition and discussions take place on related matters. But in the case of hostile acquisition, the acquisition is done with resistance from the acquired company.

December 7, 2017
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