Acquisition

Definition

Acquisition happens when a company buys a majority ownership in another company. Nomally refers to the purchase of a smaller company by a larger one.

See Also

Merger, horizontal acquisition, vertical acquisition, add-on acquisition.

Tips

Acquisitions differ from mergers. A merger is the fusion of two entities to form a new entity (A + B = C), while an acquisition is the purchase of one entity by another (A + B = A). An acquisition is both a business term and a legal term. Acquisitions can be structured as an asset acquisition (commonly called "asset sale") or a stock acquisition (commonly called "stock sale").