Unit 1 - Mergers and acquisition

What is a merger?

an agreement by shareholders and managers of two businesses to form a new larger firm

What is an acquisition?

when a company buys the majority stake of another company and becomes the controlling owner

What is a hostile?

When a bigger company buys a smaller company in the face of resistance from the smaller company's management

Horizontal integration

A business takes over or merges with another company in within the same industry and at the same stage of production

Backwards vertical integration

A business firm takes over or merges with a supplier

Forward vertical integration

A business firm takes over or merges with a supplier

Conglomerate integration (diversification)

Integration occurs between firms in unrelated industries