Mergers and acquisitions

From Wikislippy

Merger and acquisitions are tools used by companies for the purpose of expanding their operations often aiming at an increase of their long term profitability.

How It Works

The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity.

Merger

Dictionary

• 1. The act or an instance of merging; union.
• 2. The union of two or more commercial interests or corporations.
• 3. Law The absorption of a lesser estate, liability, right, action, or offense into a greater one.

From http://www.thefreedictionary.com/merger

Acquisition

An acquisition, also known as a takeover, is the buying of one company (the ‘target’) by another. An acquisition may be friendly or hostile. In the former case, the companies cooperate in negotiations; in the latter case, the takeover target is unwilling to be bought or the target's board has no prior knowledge of the offer. Acquisition usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger or longer established company and keep its name for the combined entity. This is known as a reverse takeover.