| What is the difference between mergers and acquisitions? | In reality, there is none. Mergers and acquisitions are two sides of the same coin. Mergers mean two firms merging, and acquisitions is one firm (typically a big player) buying another firm.
In principle, there are differences between mergers of equal firms and acquisitions or takeovers, where one company buys another.
In practice concepts are summarized under the term M&A, mergers and
acquisitions. The effects on the market are usually very similar independent of
the legal form of the merger.
And: there is almost always one “big player” in a merger |
| What are the 3 types of M&A | 1. Horizontal: Independent companies at the same level in the product chain produce ‘same or similar products' merge into one.
2. Vertical: Companies at different levels in the product chain merges into one, e.g., suppliers buying customers and vice versa.
3. Conglomerate: merger of independent companies producing different products, in different markets – Motives often involve economies of scope or diversification. |
