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February 14, 2006 04:19 PM

Categories: M&A and Financing

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mojo

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Joined: 09/08/2004

Realistically, these seem to be the same things - are they not?

Discussion:    Add a Comment | Comments 1-5 of 5 | Latest Comment

February 14, 2006 5:39 PM

Mergers are typically amicable "marriages" between two businesses that want to get together. Acquisitions are typically more of a purchase of one business by another business. Technically they may be handled the same way.

February 14, 2006 6:19 PM

In answer to your comment ¬? they can be the same thing and they may be different.

There are lots of variations of each so let¬?s look at two examples to show when they are different:

First in a merger, it is generally considered a friendly deal and the key parties divide the responsibilities for management or as is often the case one of the parties is retiring.

Second in an acquisition, a company is acquired for a financial reason and is operated as a separate business from the other company as in a parent and child relationship.

These are two simple examples that show extremes where they are different. If you use other variations of a merger or an acquisition your will have other views on the similarities and differences of a merger or an acquisition.

But remember if I am an individual investor looking to buy a company, I am making an acquisition.

Yes we are playing games with terminology. If there are differences or not, they have to be determined in the context of the transaction and the parties involved.

February 15, 2006 2:49 PM

I think the term "merger" is typically used when -- or to imply that -- the two companies are of roughly equal size. The term "acquisition" implies that "a big company bought a little one."

Which term will be used in the announcement is sometimes the subject of negotiations. It soothes the seller's ego to be able to say "we merged with XYZ" rather than "XYZ acquired us."

http://www.investopedia.com/university/mergers/mergers1.asp

April 1, 2006 5:54 AM

There are no mergers, "only acquisitions". One way or the other, one or the other of the two companies is going to emerge dominant."

This is from merger mania

3M & Goodyear = mmmGood
John Deere & Abitibi-Price = Deere Abi
Honeywell & Imasco & Home Oil = Honey, I'm Home
Denison Mines & Alliance & Metal Mining = Mine, All Mine
3M & JC Penney & Canadian Opera Company = 3 Penney Opera
Grey Poupon + Dockers Pants = Poupon Pants
Knott's Berry Farm + National Organization of Women = Knott NOW
Crabtree & Evelyn and Apple Computer = Crab Apple
Swissair & Cheseborough-Ponds = Swisscheese
Zippo Manufacturing & Audi & Dofasco & Dakota Mining = Zip Audi Do Da


what do u say bert??

anjeev

April 1, 2006 8:45 AM

anjeev:

Thanks, it's always good to have something to look forward to on April 1. :)

Discussion:    Add a Comment | Back to Top | Comments 1-5 of 5 | Latest Comment

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