Acquisition or Merger?
Q – Hi guys, I saw your Q&A on Mergers. I often see the words “Mergers” and “Acquisitions” put together. What is an acquisition? and what is the difference between the two?
A – Thank you for the question. An acquisition, like a merger, is a strategic decision that a company makes. However, an acquisition is when one company buys another company and makes it a division of it’s own company. The buying company continues to exist while the company that has been bought (in most cases) ceases to exist as it’s own company. Mergers are when two companies come together to create a new (and hopefully) much better company.
An example of an acquisition is when Twitter bought Periscope.
An example of a merger is when Owen Kessel merged with Leo Burnett to form Owen Kessel Leo Burnett.