The purchase, by a company, of another company, a business, product lines or brands.... more on: Acquisitions
a vehicle companies use to enter and develop new business areas involving buying an existing business. p. 348
This facilitates the management of a company to acquire a target business, which complements or fills a gap in their product or service range.
a multi-disciplinary effort to generate and apply human performance information to acquire safe, efficient, and effective operational systems
Acquisitions include the things you buy (goods, services and anything else) for your business. They also include many other transactions, such as obtaining advice or information, taking out a lease of business premises or hiring business equipment.
Purchase of a business or a business line from another entity.
Investments in goodwill and fair-value adjustments, shares, and participations.
Refers to acquisitions, mergers or exercise of preferential rights of purchase.
Acquisitions can be made for shares, cash or various permutations of the two. An acquisition occurs when one company buys another. It may be described as a merger if the two companies are of a similar size. Many acquisitions are made when the stockmarket is booming and companies pay too much. If the acquisitions do badly but have been made mostly for shares this will lead to big goodwill write-offs. These are painful but, since no cash changes hands, companies usually survive. Vodafone spent some £200bn on acquisitions like Mannesman at the height of the boom but has survived relatively unscathed because it used its share paper. By contrast, Marconi also made its acquisitions at the peak of the boom but paid in cash, much of it borrowed from banks. When its acquired businesses began to underperform it quickly found itself in severe financial difficulties. Investors need to consider acquisitions, particularly large ones, very carefully, since there is a strong school of thought that most acquisitions destroy rather than add value for the acquiring company's shareholders.
One company takes over another by purchasing its assets or shares. Acquisitions can be friendly or hostile.