Business Acquisition

In finance, the term business acquisition refers to a transaction in which one entity (the acquiring company) purchases all or part of another entity (the target company).

This may be done passively in a manner which benefits both entities, or aggressively - through a hostile takeover, for example.

Business acquisitions may be financed by a company’s capital, or by using business acquisition loans. They differ from business mergers in that a merger involves the combining of two companies as partners with equal rights.

There are many reasons why a company would acquire another company. This may be done in order to acquire technology or talent, to enter a new market, to consolidate its manufacturing process, to get rid of a competitor or to expand its product range, among other reasons.

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