Mergers (“to combine”) denotes the mutually agreeable consolidation of two or more entities to form a new organization with a new name. In merging companies of similar size and nature of the business agree to integrate their operations, for the sake of shared ownership, control, and profit.
The main reason to merge different companies is to pool resources, solidify strength, and improve weaknesses in either company. Merging also removes trade barriers, lessens competition, and helps companies gain synergy.
Some types of Merging:
Horizontal
Reverse
Vertical
Conglomerate
Acquisition
Acquisition, (“to acquire”) is the purchase of the business of an enterprise by another enterprise. It can be done through the purchase of a company’s assets, a segment of the business, or by acquiring over 51% of its paid-up share capital. Also known as a takeover (a business concept
in which one company takes control over all segments of another company). The acquisition approach is used by companies to gain instant growth, competitiveness on short notice, and expand their area of operation, market share, profitability.
Some types of Acquisition:
Buyout
Friendly
Hostile
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