acquisitions

An acquisition is a corporate action in which one company, the acquirer, purchases a majority of another company's shares to gain control. Acquisitions may be friendly or hostile, and they differ from mergers in that control is transferred through a purchase rather than a mutual combination of equals.

Acquisitions may be structured as stock purchases or asset purchases. Payment can be all cash, stock, or a combination, often with earn-outs. The process typically includes a letter of intent, due diligence, negotiation of a definitive agreement, regulatory approvals, and closing.

Common motives include rapid growth, increased market share, diversification, vertical integration, access to technology or brands, and the realization of cost or revenue synergies. Risks include overpayment, integration challenges, culture clashes, loss of key personnel, and regulatory obstacles.

Post-merger integration aims to align operations, systems, and governance while retaining critical talent. Successful integration requires clear leadership, detailed planning, cultural management, and ongoing monitoring of synergies and performance.

Notable acquisitions illustrate the practice: Microsoft’s 2016 purchase of LinkedIn, Amazon’s 2017 acquisition of Whole Foods, and Facebook’s 2012 acquisition of Instagram.