What are the differences between a merger and an acquisition?

Mergers and acquisitions are two ways companies combine with each other. While a merger and an acquisition are both corporate actions that result in two companies becoming one, there are key differences between these two terms. A merger occurs when two companies combine (often in an equal exchange) to form one single company. In a merger, the merging companies become one new company and dissolve their previous corporate entities. An acquisition, on the other hand, happens when one company purchases another company. When a company is acquired, it does not disappear and become part of the acquirer’s company. The acquired company will still exist, but it will become a subsidiary of the larger company. Mergers and acquisitions are both important ways companies are able to expand, grow, and become more profitable. The key difference is that in a merger both companies are combined to form a single company, while in an acquisition the original company still exists, but becomes a subsidiary of the larger company.

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What are the differences between a merger and an acquisition?

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