Difference between Merger and Acquisition- Finance | Management Notes

Difference between Merger and Acquisition
Financial Management
Private Equity Mergers and Acquisitions
Management Notes

S.No. Merger Acquisition
1. Merger is the combination of two or more than two companies maintaining the identity of one of the companies. Acquisition is the process of acquiring the ownership of small business entity by large business entity.
2. Merger is generally done to decrease competition and increase operational efficiency. Acquisition is generally done for the purpose of instantaneous growth.
3. Merger takes place between two entities of more or less size. For acquisition there must be one large entity which purchase small entity.
4. Merger has high number of legal formalities to done. Acquisition has less legal formalities as compared to the merger.
5. Merger is done voluntarily by the companies. Acquisition is done either voluntarily or involuntarily by the companies.
6. Merging companies is the case of mutual decision. Acquisition decision  can be friendly or hostile.

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