Mergers & Acquisitions

Merger: A merger occurs when two companies combine to form a single entity. This is typically done to achieve greater efficiency, expand market reach, or enhance competitiveness. In a merger, the companies involved often join forces as equals, and the combined business aims to benefit from shared resources and capabilities.
Example: Company A and Company B decide to merge to form Company AB. Both companies’ assets, liabilities, and operations are integrated into one new entity.

Acquisition: An acquisition happens when one company purchases another company. The acquired company becomes part of the acquiring company, and its assets, liabilities, and operations are absorbed by the buyer. Acquisitions can be friendly or hostile, depending on whether the target company is open to being acquired.
Example: Company A buys Company B. Company B now operates under the control and ownership of Company A, either retaining its original name or being rebranded as part of Company A.

Key Differences:
Merger: Two companies come together to form a new entity.
Acquisition: One company takes over another.

Both mergers and acquisitions aim to create value, improve market position, and generate synergies that benefit the involved companies.