![]() Management Acquisition: Also called a management buyout, this is a type of acquisition in which a company’s existing management buys the company from the existing private owners or the parent company.Joint Venture: This term refers to a business entity that is owned and governed by two or more parties.Consolidation occurs in both mergers and acquisitions. Consolidation: In M&A, this refers to the amalgamation of multiple organizations’ financials.There are financial and liability concerns with both options, so be sure to consult legal counsel when deciding which route to pursue. Stock Sale: In an asset sale, the acquiring company purchases the target company’s assets and liabilities a stock sale is the purchase of the owner’s shares in a company. The following is a list of key terms in M&A: Note that the templates provided here are intended for business use, not for lawyers. There is a legal component to any merger or acquisition, but that is outside the scope of this article. ![]() On the buy side, the acquiring company might want access to certain technologies, resources, position in the market, or talent on the sell side, the target company may want greater financial or market security. Organizations have many reasons to choose M&A, but they essentially boil down to increasing synergy, the idea that when combined, two entities will be more powerful or competitive than they would each be on their own. However, both terms generally refer to the consolidation of assets and liabilities that occurs when two entities combine into one. An acquisition occurs when one company (called the acquiring company) buys another, smaller company (called the acquired or target company). A merger occurs when two companies of equal size or profitability come together, renounce their individual titles and stock, and continue as one unit. Though the term M&A is common, mergers and acquisitions are actually two distinct concepts. The driving idea behind a merger or acquisition is that the companies together will be stronger, more competitive, or more profitable than they are by themselves. ![]() M&A stands for merger and acquisition, a phrase that describes two companies or organizations that combine into one entity.
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