What is acquisition, Financial Management

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Acquisition (takeover) or merger

A merger is the synergy or combination of two companies which are roughly equal in size by consensus of two organisations. A takeover is where one company acquires other which is more hostile.

- Synergy/economies of scale as the merged entity increases in size

- Eliminates competition e.g. if horizontal integration

- Rapid acquisition or synergy of expertise/brands/market share

- Could be a bargain if target company an 'underachiever'

 


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