Acquisitions

RECENT NEWS
Forbes  8 hrs ago  Comment 
The acquisition is a significant boost to Alcoa's aerospace revenue. It grows Alcoa's aerospace revenue in 2013 by 20% on a pro forma basis, from $4 billion to $4.8 billion. The acquisition will boost Alcoa's overall revenue by $1.6 billion by...
Wall Street Journal  12 hrs ago  Comment 
More than a dozen private-equity firms have revised their regulatory filings amid pressure from regulators, publicly disclosing for the first time some fees and expenses charged to investing clients.
Automotive World  Nov 21  Comment 
KUKA Aktiengesellschaft confirms that the takeover transaction for Swisslog was successful. The final acceptance quota of 80.47 percent is the same as that stated in the interim preliminary announcement, and is higher than minimum acceptance...
WA Business News  Nov 21  Comment 
Perth-based unlisted ATM provider Stargroup is set to be bought out for an undisclosed amount by ASX-listed iCash Payment Systems, after iCash announced today it has signed a memorandum of understanding for the acquisition.




 
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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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