Although both types of restructuring are intended to increase a company's value, profitability, and synergy, the concepts of a merger and acquisition are not interchangeable. The simplest difference is whether the interaction is friendly or hostile. Part of this distinction exists in how it is announced to the public and the target company's employees, shareholders, and board of directors. Friendly purchases are generally called mergers, while hostile ones are almost universally known as acquisitions. To put it plainly, a merger occurs when two companies consolidate into one new identity, whereas an acquisition involves one company taking over another entirely, establishing itself as the new sole owner.
What Is a Merger?
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