When two companies merge, the boards of directors (or the owners, if it is a private company) agree. Original companies no longer exist, and a new business is being formed, bringing together the staff and assets of the merging companies. As with any transaction, it can be simple or incredibly complex. The key is that both companies have agreed to the merger. In the company, there is a assumption of the purchase of one business (the objective) by another (the buyer or the bidder). In the United Kingdom, the term refers to the acquisition of a limited partnership as opposed to the acquisition of a private company. In a private company, because shareholders and the board of directors are usually the same or closely related, private acquisitions are generally friendly. If the shareholders accept the sale of the company, the board of directors is generally the same opinion or sufficiently under the orders of the shareholders to cooperate with the bidder. This point is not relevant to the British acquisition concept, which still concerns the acquisition of a limited company. There are a variety of tactics or techniques that can be used to deter a hostile takeover. If the acquisition of a business consists only of an offer of one amount of money per share (as opposed to all or part of the payment in shares or bonds), it is an all-cash agreement. [5] This does not define how the purchasing company receives money that may come from existing cash; Loans or a separate issue of shares. In the United States, a common defence against hostile acquisitions is to use Section 16 of the Clayton Act to obtain an injunction, on the grounds that Section 7 of the Act would be violated if the supplier acquired the target`s action.

[1] A backflip takeover is any type of acquisition in which the beneficiary company transforms into a subsidiary of the acquired business. This type of acquisition can occur when a larger but less well-known company buys a struggling company with a well-known brand. A hostile takeover is the acquisition of one company (the target company) by another (the so-called acquirer) by a direct stake in the company`s shareholders or the struggle to replace management to obtain permission to acquire it. A hostile takeover can be done either through an offer or a proxy fight. Acquisitions also tend to replace foreign capital with equity. In a sense, any public tax policy that allows for the deduction of interest expenses, but not dividends, has essentially provided a significant subsidy for acquisitions. It can sanction more conservative or prudent management that does not allow its companies to put themselves in a high-risk position. High leverage will lead to high profits if circumstances go well, but can lead to catastrophic failure if they do not. This can result in significant negative external effects for governments, staff, suppliers and other interest groups. Another cost factor for hostile acquisitions is the effort and money that companies invest in their acquisition defence strategies.

Constant fear of a recovery can hinder growth and stifle innovation and fuel employees` fears about job security. Other acquisitions are strategic insofar as they are ancillary, which go beyond the simple effect that the profitability of the target company adds to the profitability of the profiting company. For example, a company that takes control may decide to buy a profitable business with good distribution capabilities in new sectors that the recipient company can also use for its own products. A target company could be attractive because it allows the accrediting company to enter a new market without having to take responsibility for the risk, time and cost of creating a new division.