Acquisitions

RECENT NEWS
New York Times  3 hrs ago  Comment 
The enthusiasm of investors for the new fund reflects the sense that private equity firms are poised to strike big deals — and mint money.
guardian.co.uk  5 hrs ago  Comment 
Small group of investors led by ex-Chelsea executive Paul Smith reportedly interested in buying FA Cup finalists Aston Villa are being targeted for a £150m takeover by a consortium led by a former Chelsea director. Paul Smith, who was the...
Wall Street Journal  7 hrs ago  Comment 
Scripps Networks Interactive Inc. said profit declined 3.5% in the first quarter, due in large part to costs stemming from acquisitions and restructuring.
Benzinga  May 6  Comment 
Shares of Ann Inc (NYSE: ANN) jumped over 12 percent in after-hours trading amid a report that Golden Gate Capital may acquire the company. According to Reuters, the deal would value the company at approximately $2 billion versus its market...
Forbes  May 6  Comment 
Mark Donegan has guided Precision Castparts to a more than 11-fold return since he took over as chief executive by aggressively expanding the manufacturer of metal castings for the aerospace industry through acquisitions.
OilVoice  May 6  Comment 
Norwest Energy NL ASXNWE is pleased to report the onground seismic acquisition work for the Arrowsmith seismic survey has been successfully completed allowing for the processing and interpretatio




 
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Acquisitions are the purchase a controlling stake in another company by purchasing 51 percent or more of its voting shares with cash, stock, or a combination of the two.

Mergers and acquisitions are two closely related terms and are often listed together on a company's balance sheet as mergers and acquisitions (M&A). But there is an important distinction between these terms - in a merger, two companies become one and both original companies cease to exist; in an acquisition, the acquired company is absorbed by the acquiring company, and only the acquired company ceases to exist.

An acquisition, also sometimes called a takeover or buyout, usually involves the takeover of a smaller firm by a larger one. But there are occasions when a smaller firm will obtain the management control of a larger company, and in these cases the smaller acquiring firm will often keep the existing company name and brand in place for the new, combined company. Takeovers or acquisitions can be friendly, where the management of the company to be acquired negotiates a deal with the acquiring company; or, they can be hostile, where the takeover is made despite opposition by the company's management or an offer is made without prior knowledge by the company's board of directors.

Examples

An acquisition can be carried out in one of two ways:

  • The acquiring company buys the shares of the acquired company and obtains ownership control.
  • The acquiring company buys the assets of the acquired company, and the cash that the acquired company receives in return is paid to shareholders through a divided or by liquidating the company. If the acquiring company buys the entire assets of the acquired company, this leaves the acquired company as an empty shell which is eventually liquidated or enters another line of business.
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