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Merger
A merger is a tool by companies for the purpose of expanding
their operations often aiming at increase of their long term profitability.
There are several types of actions that a company can take when
deciding to move forward using M&A. Usually mergers occur in
a consensual (occurring by mutual consent) setting where executives
from the target company help those from the purchaser in a due diligence
process to ensure that the deal is beneficial to both parties. Acquisitions
can also happen through a hostile takeover by purchasing the majority
of outstanding shares of a company in the open market against the
wishes of the target's board
Acquisitions
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 companies cooperate in negotiations; in the latter
case, the takeover target is unwilling to be bought or the targets
board has no prior knowledge of the offer. Acquisitions usually
refer 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.
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