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What is acquisition?
What is the difference between a merger and an acquisition?

What is acquisition?

Generally speaking, a Merger is two separate entities combining into one, whereas an Acquisition is when one entity is taken over by another.
There are various legal descriptions for each consolidation method, depending on how the transaction is carried out.

What is the difference between a merger and an acquisition?

Merger – the boards of directors of the separate companies involved in the transaction approve the combination of their companies and seek their respective shareholders’ approval. Merging companies tend to be similar in size and, after the merger, they combine into a new entity altogether.
Example: in 1998, Citicorp merged with Travelers Group and became Citigroup

Acquisition – in a simple such transaction, the acquiring company obtains “the majority stake” (over 50% of the stock) of the acquired firm, which keeps its name and organization/legal structure. Another way to make an acquisition is to purchase all the assets of the “target company.” This is relatively frequent in the case of bankruptcy, when the acquired company is usually liquidated after the transfer of assets is complete. A third type of acquisition is when a larger company purchases a smaller one and integrates it into the existing products or services

Example of type 3: Apple purchased Siri and integrated the “personal assistant” into its existing products.

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