An acquisition is slightly different from a merger. Unlike all mergers, all acquisitions involve one company purchasing another - there is no exchange of stock or consolidation as a new company. One company can buy another company with cash, stock or a combination of the two.
Acquisition is likely to be friendly or hostile. In a hostile acquisition, the company, which is to be bought has no information about the acquisition and is taken by surprise. Usually, a company acquires another company against the wishes of the company being acquired. In a friendly acquisition, the companies cooperate with each other and go ahead with acquisitions. In acquisition, normally a larger company buys a smaller company. In some cases the minor company will acquire managing power of a larger company and retain the larger company's name. This is also well-known as reverse takeover.
Following are the types of acquisitions:
The advantages of acquisition are as follows: