Difference Between Merger And Acquisition
The main dissimilarities or difference between merger and acquisition can be pointed out as follows:
1. Introduction
Merger: Formation of new company by combining two or more companies of similar size and nature
Acquisition: Taking control or acquiring the ownership of one company by another large company.
2. What Is It?
Merger: It is a combination
Acquisition: It is acquiring process
3. New Company
Merger: New company is emerged
Acquisition: New company is not emerged
4. Benefits
Merger: It reduces competition, improves efficiency and helps to achieve economies of scale
Acquisition: It helps to expand business and to reduce operational costs
5. New Stock
Merger: Existing stocks are surrendered and new stocks are issued for new company
Acquisition: No need to issue new stock
6. Name/Title
Merger: New name or title is provided for newly formed company
Acquisition: Name of the large company (acquiring company) is used
7. Power And Control
Merger: Equal power is shared between both companies
Acquisition: Acquiring company gains total power
Also Read:
Also Read:
8. Size Of Companies
Merger: Generally, similar sized companies are merged together
Acquisition: Large company takes over the smaller company
9. Complexity
Merger: It is more complex process than acquisition because of lengthy legal procedures and more formalities
Acquisition: It is simple process because of less formalities and legal procedure.
Merger Vs Acquisition (Comparison Chart)
I hope this post is helpful to understand the difference between merger and acquisition and to make comparison between them.
Merger Vs Acquisition (Comparison Chart)
Basis For Difference
|
Merger
|
Acquisition
|
Introduction
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Combination of two or more companies to form a new company
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Acquiring the ownership of one company by another company
|
It Is
|
Combination
|
Acquiring
|
New Company
|
Emerged
|
Not emerged
|
Benefits
|
reduce competition and improves efficiency
|
Expands business
|
New Stock
|
Issued
|
Not issued
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Name/Title
|
New
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Name of acquiring company
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Power And Control
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Equally shared
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Acquiring company has full power and control
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Size Of Companies
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Similar
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Large company acquires small company
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Process
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Complex
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Simple
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I hope this post is helpful to understand the difference between merger and acquisition and to make comparison between them.
