What are the differences between Mergers and Acquisitions?


4 Answer(s)


Merger can be described as a situation where two companies come together to be in business for the goal of making a profit ie the two companies integrate to work together while Acquisition is a method or process where one company bought over the asset and liabilities of another company and continue the business with the aim of profitability.

merger means the separately owned companies become jointly owned and obtain a new single identity. when two firms merge, stocks of both are surrendered and new stocks in the name of new company are issued.
but in acquisition, one company takes over another company to establish its power as the single owner.
generally the company takes over is the bigger and stronger one than other.

Merger is when two companies of equal size come together.In case of acquisition, the size of the companies are different. The purpose in both the case is synergy

Two companies together are more valuable than two separate companies - at least, that's the reasoning behind M&A.
Whether a purchase is considered a merger or an acquisition really depends on whether the purchase is friendly or hostile and how it is announced.

one type of acquisition is a reverse merger, a deal that enables a private company to get publicly-listed in a relatively short time period. A reverse merger occurs when a private company that has strong prospects and is eager to raise financing buys a publicly-listed shell company, usually one with no business and limited assets. The private company reverse merges into the public company, and together they become an entirely new public corporation with tradable shares.