Buyout

Finance allah shmoop what's the difference between mergers and acquisitions

all right people listen up Merger that's what's about to

happen here it's a merger acquisition that's what's about to

happen here Corporate america is kind of same thing when

two companies merge while they generally you know attracted to

each other hopefully respect each other they share stock or

combined the stocks of each side and you know combine

efforts and then and then cuddle afterwards if they're successful

at the merger than the combination of two roughly equals

yields more than the one plus one combo that made

them so two companies get together on generally equal ish

footing In that case acquisitions are a combining more like

that eating thing on much different footing The large company

eats or buys the target either using its more highly

valued stock currency or it's taft to do so Well

why would a company acquire another Well the target might

have one hundred employees ninety of whom can be fired

with massive expense savings after the acquisition For the acquirer

such that economically the acquisition won't just makes a whole

lot of financial sense acquisitions happen for market power reasons

As well like imagine the negotiating leverage that amazon would

have if it bought the next five biggest online retailers

Or maybe it'll just kill them Probably not legal for

them to buy him anyway given the monopoly like dominance

of amazon these days But wow that would be a

powerful set of acquisitions And that would be a good

reason for ems on to acquire a whole bunch Things

and bezos would grow even more powerful maybe too powerful