Glossary
Definition
Mergers & Acquisitions (M&A)
Transactions where companies are combined or one buys another.
Mergers and acquisitions (M&A) refer to corporate transactions involving the consolidation of companies. A merger is when two companies combine to form a new entity. An acquisition is when one company purchases another. M&A activity is driven by strategic goals such as entering new markets, eliminating competition, acquiring technology, or achieving cost synergies.
Frequently Asked Questions
What happens to shareholders in an acquisition?
In a cash acquisition, shareholders receive a cash payment for their shares (usually at a premium to the market price). In a stock-for-stock deal, they receive shares in the acquiring company. The target company's stock price typically rises toward the offer price once a deal is announced.