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  • Difference between Merger and Acquisition

    Merger vs Acquisition

    Merger and acquisition are very well known terms that are used when people are talking about companies, organizations. They are processes of corporate restructuring. Both are defined as a process of combining two or more companies together. Both look similar but they are different terms used under different situations. Check out the below Difference between Merger and Acquisition.

    Merger

    Difference Between Merger and Acquisition

    • Merger is the term used when two or more companies / organizations come together to expand thier businesses.
    • Merger deals are mostly finalized on friendly terms.
    • Two or more companies share equal profits in the newly created company.
    • In merger, two equal companies or of same size comes together and are merged
    • A deal in case of merger happens when two companies of same size combine to increase the business strength and also financial gains.

    Acquisition

    Difference Between Acquisition and Merger

    • Acquisition is the term used when one company takes over the other and rules all its businesses.
    • Acquisition happens when the company aquring the other company due to running in loss or wants to get out of the business and wants to get one time payment. The company which is acquiring is having a strong hold in the market.
    • One company overpowers the other company and the decision is mainly taken during downturns in economy or during declining profit margins.
    • In Acquisition, two companies of different sizes come to gether to control the loss and make it into profitable firm.
    • A deal in case of acquisition happens when one company is taking over the weak company or the company in loss is forced to sell to the stronger company.

    These are the few differences between Merger and Acquisition.

    Posted under: Finance
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