Tuesday, 14 August 2012

Mergers & Acquisitions - Some definitions

  • Acquisitions: purchase of some portion of one company.
  • Merger: absorption of one company by other.
  • Statuary merger: acquirer acquires all target’s assets.
  • Subsidiary merger: target becomes subsidiary after purchase.
  • Consolidation: both cease to exist to become a new company.
  • Target Company: one being acquired.
  • Acquiring company: company acquiring target.
  • Hostile transaction: potential business combinations without management & board’s consent.
  • Friendly transaction: business combinations approved by management of both companies.
  • Horizontal merger: merging companies in same kind of business.
  • Vertical merger: companies at different position in same value chain.
  • Backward integration: acquirer purchases target ahead of it in value chain.
  • Forward integration: acquirer purchases target further down the value chain.
  • Conglomerate merger: Acquires purchasing target unrelated to its core business.

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