What is the Difference Between Takeover and Acquisition?
🆚 Go to Comparative Table 🆚The main difference between a takeover and an acquisition lies in the level of consent and cooperation between the companies involved. Here are the key distinctions:
- Acquisition: In an acquisition, one company buys another company, which may or may not involve the consent of the target company. Acquisitions can be friendly, with the agreement and cooperation of both parties, or hostile, when the target company resists the acquisition attempt.
- Takeover: A takeover occurs when one company acquires a controlling interest in another without the target company's consent. The acquiring company bypasses the target's management and shareholders by making a direct offer, such as a tender offer or a proxy fight. Takeovers are a form of acquisition but often imply a hostile or unsolicited acquisition bid.
In summary, while both takeovers and acquisitions involve the consolidation or combination of companies, the key difference lies in the level of consent and cooperation between the companies involved. Acquisitions can be friendly or hostile, while takeovers are typically hostile and involve the acquiring company taking control of the target company without its consent.
Comparative Table: Takeover vs Acquisition
Here is a table comparing the differences between a takeover and an acquisition:
| Takeover | Acquisition |
|---|---|
| Involves a larger company purchasing a smaller one, sometimes without the smaller company's consent | Involves one company taking control of another, often with the agreement and cooperation of both parties |
| May be friendly or hostile, with the term "acquisition" generally implying a more amicable transaction | Often resulting in the creation of a new entity, with the parent company and the target company mutually combining |
| The acquiring company bypasses the target's management and shareholders by making a direct offer, such as a tender offer or a proxy fight | The merged companies choose a new name and issue new shares |
| The purchasing company may acquire at least 51% of the smaller business's stock to take control | The smaller company may continue using its original name, depending on the specific terms of the agreement |
In summary, a takeover involves a larger company purchasing a smaller one, while an acquisition involves one company taking control of another. Acquisitions can be friendly or hostile, with the terms "merger" and "acquisition" often used interchangeably. In a merger, the parent company and the target company mutually combine to form a new entity, while in an acquisition, the purchasing company acquires at least 51% of the smaller business's stock to take control.
- Merger vs Takeover
- Merger vs Acquisition
- Amalgamation vs Acquisition
- Acquisition vs Procurement
- Acquire vs Obtain
- Purchase vs Acquisition (Method of Accounting)
- Learning vs Acquisition
- Take vs Get
- Customer Retention vs Acquisition
- Purchase vs Buy
- Acquire vs Procure
- Ownership vs Possession
- Purchase vs Procurement
- Amalgamation vs Merger
- Hire vs Lease
- Bring vs Take
- Lease vs Buy
- Procurement vs Purchasing
- Turnover vs Profit