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Trading and Investment Terms

Acquisition

  • An acquisition is when one company purchases most or all of another company's shares to gain control of that company.
  • It occurs more regularly between small to medium-size firms than between large companies.
  •  Purchasing more than 50% of a target firm's stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s shareholders. 
  • Acquisitions, which are very common in business, may occur with the target company's approval, or despite its disapproval. 
  • With approval, there is often a no-shop clause during the process.

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