Definition
- Acquisition
- An acquisition is when one firm purchases another, which may carry on operating under its former company name.
- Not to be confused with: Merger
- A merger is when two formerly separate firms combine to become a single firm, operating from then on under common ownership.
Test yourself
What is the difference between acquisition and merger?
Both put two firms under common ownership: a merger combines them into one new firm, an acquisition has one firm buy the other.