Differences between Merger and Acquisition

                   We often use merger and acquisition together or interchangeable. And we often get confused with the term Merger and Acquisition when explained. Today lets us know the how merger and acquisition differ from each other.  And lets us try to understand which and when it  is called a merger and which and when is called a acquisition.

Merger Vs Acquisition

§     Merger is the combination and pooling of equals and creating a new firm to operate in the market where as Acquisition is acquiring or purchasing a firm and absorbing operations of the acquired firm.

§       After merger the firms come together and operate under a new name while after acquisition  the name of the acquiring firms remains and the operations and control of acquired firm comes under the control of acquiring firm.

§  In pure sense Merger means two firms of equal size coming together and operating under a single new name. it is also referred as “Merger of Equals”.  While Acquisition is purchasing of one firm over another firm in one or the other way. Usually mergers of equal aren’t practical possible as in one or the other way acquiring takes place now a days.

§     A deal is also said to be Merger if CEOs have agreed to join together the best interest of their companies. While an unfriendly or a target firm does not want it to be acquired by another firm is called Acquisition.

§        Merger is a friendly deal while Acquisition is bringing other company forcible.