Mergers and acquisitions (M&A) are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated with other entities. As an aspect of strategic management, M&A can allow enterprises to grow or downsize, and change the nature of their business or competitive position.
Acquisition
An acquisition/takeover is the purchase of one business or company by another company or other business entity. Specific acquisition targets can be identified through myriad avenues including market research, trade expos, sent up from internal business units, or supply chain analysis.
Such purchase may be of 100%, or nearly 100%, of the assets or ownership equity of the acquired entity. Consolidation/amalgamation occurs when two companies combine to form a new enterprise altogether, and neither of the previous companies remains independently. Acquisitions are divided into “private” and “public” acquisitions, depending on whether the acquiree or merging company (also termed a target) is or is not listed on a public stock market.
Some public companies rely on acquisitions as an important value creation strategy An additional dimension or categorization consists of whether an acquisition is friendly or hostile.
Selling of companies
Make selling your small business easy with these seven steps.
- Determine the value of your company
- Clean up your small business financials
- Prepare your exit strategy in advance
- Boost your sales
- Find a business broker
- Pre-qualify your buyers
- Get business contracts in order