What is the difference between a merger and a takeover?



1
Kindly can anyone explain me the exact difference between a merger and takeover of a company?Which is better and why?How to analyse whether to merge with a company for example A,or whether to takeover a company?Depending on what conditions it is better to decide?

4 Answer(s)


1

Hi, merger takes place when two companies, usually of around the same size, decide to become one new firm instead of being seperately owned and operated. This can be mostly seen in the firms of same value..where as in acquisition a bigger company takes over a smaller company..The only difference between mergers and acquisitions include one organization buying the other, they don't have to exchange reserves..i believe rest of your questions can be easily answered once you understand these terms.

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Bhagath is absolutely right.

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putting it simply
Merger is more a voluntary joining of forces, assets, etc. Take over is typically more aggressive and the one being taken over has little say in the matter. They become part of the company taking them over, not a partner to them.

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I think this link might be a little more usefull..

http://i.investopedia.com/inv/pdf/tutorials/ma.pdf

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