The term “mergers and acquisitions” refers to the variety of ways you can transfer ownership of your business.

MERGER

In a merger, your company combines with another company to become a new entity. This new company may retain the name of the more prominent company, which absorbs the old one, or it may take on a name that combines the names of the previous two companies. The new company may even adopt a brand-new name.

ACQUISITIONS

In an acquisition, the more prominent company simply buys your company. Your company entity ceases to exist, and all of its assets become a part of the buying company. These essential assets typically include your employees, customers, reputation, know-how, and hard assets such as equipment, fixtures, inventory, etc.

In Mergers and Acquisitions, many different scenarios exist where a business can be joined with another business entity. The outlying situation and how the two firms are combined result in the type of merger that occurs.