Acquisition
 |
Definition of 'Acquisition'A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both. |
|
Investopedia explains 'Acquisition'Acquisitions can be either friendly or hostile. Friendly acquisitions occur when the target firm expresses its agreement to be acquired, whereas hostile acquisitions don't have the same agreement from the target firm and the acquiring firm needs to actively purchase large stakes of the target company in order to have a majority stake.In either case, the acquiring company often offers a premium on the market price of the target company's shares in order to entice shareholders to sell. For example, News Corp.'s bid to acquire Dow Jones was equal to a 65% premium over the stock's market price. |
Related Definitions
Articles Of Interest
-
Mergers And Acquisitions: Understanding Takeovers
In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game. -
Catching Comeback Stocks For Clients
We'll give you the clues you need to assess which stocks can make a turnaround. -
Public Relations: Offering Businesses A Competitive Advantage
To maximize the sales potential of any business, a public relations program should be part of the master marketing plan. -
Mergers & Acquisitions: An Avenue For Profitable Trades
When major corporate transactions have a big impact on the currency markets, you can benefit. -
What is the difference between an acquisition and a takeover?
There is no tangible difference between an acquisition and a takeover; both words can be used interchangeably - the only difference is that each word carries a slightly different connotation. ... -
Conglomerates: Cash Cows Or Corporate Chaos?
Huge companies may not be as infallible as previously assumed. Find out why bigger isn't always better. -
Consulting - Everybody's Doing It, Should You?
Fancy yourself a problem solver? Management consulting might be right for you. -
Acquire A Career In Mergers
This exciting sector demands a lot from its advisors. Are you up for it? -
What does the term "stock-for-stock" mean?
The term "stock-for-stock" is popularly used in two different contexts, and it regularly makes business news headlines in both."Stock-for-stock" most commonly appears in headlines in reference ... -
Why do companies merge with or acquire other companies?
Some of the reasons for mergers and acquisitions (M&A) include:1. Synergy: The most used word in M&A is synergy, which is the idea that by combining business activities, performance will ...
