Acquisitions

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Wall Street Journal  11 hrs ago  Comment 
Affluent individuals can invest in private equity, a type of investment more common among institutions, through the Altegris-managed fund.
Reuters  Apr 24  Comment 
* CEO says no comment on Pfizer, completely focused on developing pipeline
Insurance Journal  Apr 24  Comment 
Standard & Poor’s Ratings Services said that its ratings on Willis Group Holdings plc (BBB-/Positive/–) “are not affected by the company’s proposed acquisition of the remaining 70 percent that it does not already own of French-based...
The Economic Times  Apr 24  Comment 
The combination of the Finnish and French companies could pose challenges for Ericsson in terms of a more complete product line across the mobile and fixed telecom gear segments.
Reuters  Apr 23  Comment 
Canadian Imperial Bank of Commerce is in talks with several U.S. companies on a potential $2 billion wealth-management and private-banking acquisition, its top executive said in...
FierceBiotech  Apr 23  Comment 
In the absence of an actual biotech buyout to report, speculation will have to do. Bloomberg put the spotlight on Clovis Oncology, which reportedly tried to sell itself a couple of years ago--a mention of which usually causes Clovis CEO Patrick...
Insurance Journal  Apr 23  Comment 
Willis Group Holdings plc, the third-largest insurance broker, offered to buy the 70 percent of Gras Savoye that it doesn’t already own to expand in France, Eastern Europe and the Middle East. Willis will pay 550 million euros ($590 million),...




 
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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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