10 Questions
An acquisition describes one company taking over another and establishing itself as the new owner, the purchase is called a(n) ______
acquisition
A merger describes two firms, of approximately the same size, that join forces to move forward as a single new entity, rather than remain separately owned and operated. This action is known as a(n) ______ of equals.
merger
The term mergers and acquisitions (M&A) - refers to the consolidation of companies or their major business assets through financial transactions between companies. A company may purchase and absorb another company outright, merge with it to create a new company, acquire some or all of its major assets, make a tender offer for its stock, or stage a(n) ______ takeover.
hostile
A tender offer is a public solicitation to all shareholders requesting that they tender their stock for sale at a specific price during a certain time. The tender offer typically is set at a higher price per share than the company's current stock price, providing shareholders a greater incentive to sell their shares. All are M&A ______.
activities
When one company takes over another and establishes itself as the new owner, the purchase is called an ______
acquisition
When one company takes over another and establishes itself as the new owner, the purchase is called an _______
acquisition
_______ and acquisitions are often used interchangeably, however, they have slightly different meanings. When one company takes over another and establishes itself as the new owner, the purchase is called an acquisition. A merger describes two firms, of approximately the same size, that join forces to move forward as a single new entity, rather than remain separately owned and operated. This action is known as a _______ of equals.
mergers
A tender offer is a public solicitation to all shareholders requesting that they tender their stock for sale at a specific price during a certain time. The tender offer typically is set at a higher price per share than the company's current stock price, providing shareholders a greater incentive to sell their shares. All are M&A _______.
activities
A company may purchase and absorb another company outright, merge with it to create a new company, acquire some or all of its major assets, make a tender offer for its stock, or stage a _______ takeover. All are M&A activities.
hostile
The term _______ refers to the consolidation of companies or their major business assets through financial transactions between companies.
mergers
Study Notes
Mergers and Acquisitions (M&A)
- An acquisition occurs when one company takes over another and establishes itself as the new owner.
- A merger describes two firms of approximately the same size joining forces to move forward as a single new entity.
Types of M&A
- Acquisition: one company takes over another and establishes itself as the new owner.
- Merger: two firms of approximately the same size joining forces to move forward as a single new entity.
- Tender offer: a public solicitation to all shareholders requesting that they tender their stock for sale at a specific price during a certain time.
- Hostile takeover: a company takes over another despite the target company's resistance.
M&A Activities
- Purchase and absorb another company outright.
- Merge with another company to create a new company.
- Acquire some or all of another company's major assets.
- Make a tender offer for another company's stock.
- Stage a hostile takeover.
Key Terms
- Consolidation of companies or their major business assets through financial transactions between companies is referred to as M&A.
- Merger of equals: two firms of approximately the same size joining forces to move forward as a single new entity.
Test your knowledge of mergers and acquisitions with this quiz! Learn about the differences between the two terms and understand the dynamics of company takeovers and consolidations.
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