What are the differences between a merger and an acquisition?

Mergers and acquisitions (M&A) are terms used to describe when two or more companies join together. Mergers and acquisitions are governed by complex laws and regulations, which vary by state. In New Hampshire, the Mergers and Acquisitions Law outlines the requirements for businesses who are looking to merge or acquire another company. The main difference between a merger and an acquisition is who is in control of the combined entity. In a merger, the companies joining together become one, new entity and the executives of each company share control of the new entity. In an acquisition, one company acquires the other, and the acquiring company maintains control. The acquired company will then become a subsidiary of the acquiring company and will be subject to the policies of the acquiring company. Additionally, in a merger, the companies often exchange equity, meaning that stock in the new entity is issued to the shareholders of each company. In an acquisition, the acquiring company usually pays cash or assume liabilities of the acquired company. Lastly, the legal structure of a merger and an acquisition will also differ. In a merger, the new entity will have to be incorporated, and the structure of the combined company will need to be determined. In an acquisition, the company that is being acquired is usually dissolved, and the acquiring company will take on its assets and liabilities.

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What are the differences between a merger and an acquisition?

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