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  #1  
February 4th, 2016, 09:47 AM
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merger vs acquisition

Hi I would like to know the difference between mergers & acquisition as I am preparing a project on it as well as a few examples of the same in India?
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  #2  
February 4th, 2016, 09:48 AM
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Join Date: Mar 2012
Re: merger vs acquisition

Merger and Acquisition (M&A) are two terms that are mutually uttered, whenever one hears them. Are they both one? The answer is no, Merger literally means “to combine” while Acquisition literally means “to acquire”. In business vocabulary, Merger is a type of Amalgamation where 2 entities combine to form a new entity. But, if we talk about Acquisition, it is comparable to a takeover, in which one company is acquired by another company.

BASIS FOR COMPARISON
MERGER

ACQUISITION


Meaning
The merger means the fusion of two or more than two companies voluntarily to form a new company.

When one entity purchases the business of another entity, it is known as Acquisition.

Formation of a new company
Yes

No

Nature of Decision
The mutual decision of the companies going through mergers.

Friendly or hostile decision of acquiring and acquired companies.

Minimum number of companies involved
3

2

Purpose
To decrease competition and increase operational efficiency.

For Instantaneous growth

Size of Business
Generally, the size of merging companies is more or less same.

The size of the acquiring company will be more than the size of acquired company.

Legal Formalities

More legal formalities involved

Less legal formalities

Examples of Mergers and Acquisitions in India
• Acquisition of Corus Group by Tata Steel in the year 2006.
• Acquisition of Myntra by Flipkart in the year 2014.
• Merger of Fortis Healthcare India and Fortis Healthcare International.
• Acquisition of Ranbaxy Laboratories by Sun Pharmaceuticals.
• Acquisition of Negma Laboratories by Workhardt


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