What does acquisition mean?
june 26, 2023
Acquisition means: buying part or all of the shares or assets of another company
A company buying the assets and assets of another company and transferring its ownership to the acquiring company
As a successful entrepreneur, you may reach a stage where you want to increase and develop, merging and acquiring another company is a good step.
- Types of mergers and acquisitions and tips to consider.
The financial and administrative control of one company over the activity of another company, by purchasing all or a percentage of the common shares that have the right to vote in the general assembly of the acquired company, whether the shares were purchased in agreement with the current management or without it, because the goal is that the purchased percentage allows the acquiring company to dominate the board of directors of the acquired company.
Acquisitions and mergers can be classified into several types, based on several factors, including:
- Type of target company: The target company can be a competing company, a company that provides complementary products or services, or a company operating in a new field.
- Method of Acquisition: Acquisition or merger can be done by purchasing the target company’s shares, by purchasing its assets, or by merging the two companies into a new company.
- Strategic Objectives: Acquisition or merger can be for the purpose of expanding the business, acquiring new capabilities, improving efficiency, or increasing profits.
Here are some of the most common types of acquisitions and mergers:
- Horizontal Acquisition: This type of acquisition occurs when a company acquires another company operating in the same industry. For example, an automobile manufacturer might acquire another automobile manufacturer.
- Vertical Acquisition: This type of acquisition occurs when a company acquires another company operating at a different stage of the supply chain. For example, an automobile manufacturer might acquire an auto parts manufacturer.
- Diversified Acquisition: This type of acquisition occurs when a company acquires a company operating in a completely different industry. For example, a technology company might acquire a clothing manufacturer.
- Merger: This type of acquisition occurs when two companies combine to form a new company. For example, two automobile manufacturers may merge to form a new company.
Acquisitions and mergers can be a powerful tool used to achieve business goals. However, it is important to conduct thorough research and evaluate potential risks before moving forward with any acquisition or merger.
Here are some of the potential risks associated with acquisitions and mergers:
- Cost: Acquisitions and mergers can be very expensive, both in terms of money and time.
- Legal risks: Acquisitions and mergers can be associated with legal risks, such as lawsuits or antitrust issues.
- Integration risks: Integrating companies’ processes or cultures can be difficult.
By conducting thorough research and evaluating potential risks, companies can reduce the risks of acquisitions and mergers and increase their chances of success
