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.[1][2] 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.[3] An additional dimension or categorization consists of whether an acquisition is friendly or hostile.
A horizontal merger is usually between two companies in the same business sector. An example of horizontal merger would be if a video game publisher purchases another video game publisher, for instance, Square Enix acquiring Eidos Interactive.[19] This means that synergy can be obtained through many forms such as; increased market share, cost savings and exploring new market opportunities.
^ De Jong, Abe; Gelderblom, Oscar; Jonker, Joost (2010), 'An Admiralty for Asia: Isaac le Maire and Conflicting Conceptions About the Corporate Governance of the VOC'. (Working Paper Erasmus Research Institute of Management, 2010). Gelderblom, de Jong, and Jonker (2010)"(...) In 1597 Van Oldenbarnevelt started pushing for a consolidation because the continuing competition threatened to compromise the Dutch fight against Spain and Portugal in Asia (Den Heijer 2005, 41). The companies of Middelburg and Veere followed the Amsterdam example and merged into one Verenigde Zeeuwse Compagnie in 1600. The idea for a merger between the all companies, first considered in 1599, then reappeared, given new momentum by the emergence of the East India Company in Britain. (...) Negotiations between the Dutch companies took a long time because of conflicting demands. Firstly, the Estates General wanted the merger to secure a strong Dutch presence in Asia. The hot rivalry between the voorcompagnieën undermined the country's fragile political unity and economic prosperity, and seriously limited the prospects of competing successfully against other Asian traders from Europe. By attacking the Luso-Hispanic overseas empire, a large, united company would also help in the ongoing war against the Spanish Habsburgs. Initially Van Oldenbarnevelt thought of no more than two or three manned strongholds (Van Deventer 1862, 301), but the Estates General wanted an offensive (Van Brakel 1908, 20-21)."
Objectively evaluating the historical and prospective performance of a business is a challenge faced by many. Generally, parties rely on independent third parties to conduct due diligence studies or business assessments. To yield the most value from a business assessment, objectives should be clearly defined and the right resources should be chosen to conduct the assessment in the available timeframe.
An acquisition is when one company purchases most or all of another company's shares to gain control of that company. Purchasing more than 50% of a target firm's stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s shareholders. Acquisitions, which are very common in business, may occur with the target company's approval, or in spite of its disapproval.
