Acquisitions

RECENT NEWS
Wall Street Journal  44 min ago  Comment 
Can maker firm Rexam said it is in takeover talks with U.S. peer Ball, valuing it at $6.5 billion, or 610 pence a share, a 36% premium to its closing share price of 447.6 pence.
Forbes  52 min ago  Comment 
From Siri to NeXT, retracing Apple's biggest acquisitions over the years.
Reuters  2 hrs ago  Comment 
* Philips extends tender offer period to acquire Volcano Corp
Financial Times  3 hrs ago  Comment 
UK’s biggest property deal for a decade to proceed with offer from Qatar and Brookfield accepted
MarketWatch  Feb 4  Comment 
Under Armour, Inc. announced Wednesday that it had reached an agreement to acquire MyFitnessPal, a fitness app, for $475 million. The company finished its acquisition of Endomondo in early January for $85 million. With both companies and the...
Yahoo  Feb 4  Comment 
Starboard Value has been pressuring Staples to buy out Office Depot since December. Are activist investors good for the market?
Wall Street Journal  Feb 4  Comment 
Whirlpool Corp. said that recent acquisitions in Europe and Asia helped drive a better-than-expected 17.9% sales increase in its fourth quarter.
Reuters  Feb 4  Comment 
U.S. buyout group Clayton, Dubilier & Rice has sold a 12 percent stake in B&M European Value Retail, the fast-growing British discount store chain, raising 384 million pounds ($582...
Wall Street Journal  Feb 4  Comment 
Mallinckrodt said its earnings more than doubled in the fourth quarter due to growth in its specialty generics segment, which was driven mostly by acquisitions.




 
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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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