What are the differences between a merger and an acquisition?

Mergers and acquisitions are business transactions that allow companies to grow and expand. Although both involve merging two companies, there are some key differences between a merger and an acquisition. A merger occurs when two companies combine to form a single entity. The companies cease to exist as separate entities and the resulting company keeps the name of one of the merging companies. There are often multiple shareholders for both companies and the two companies come together to form a new company. An acquisition, on the other hand, is when one company buys another. The purchasing company may choose to keep the name of the acquired company or to adopt its own name. The shareholders of the acquired company may or may not still have shares in the new, purchasing company after the acquisition. In South Carolina, the law states that both mergers and acquisitions must be approved by the Department of Consumer Affairs. Whether it is a merger or an acquisition, the law requires that certain documents and information be provided to the department before the transaction can be completed. These documents and information show that the transaction is conducted in an ethical and legal manner.

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What are the differences between a merger and an acquisition?

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