Institute of Law, Nirma University, Ahmedabad, INDIA
November 21, 2011
Mergers and acquisitions in its basic terminology means that merger is a combination of two companies to form a new company, while an acquisition (or takeover) is the purchase of one company by another in which no new company is formed. Although the terms Mergers and Acquisitions may be used synonymously, but they differ in sense that a merger take place when two firms agree to go forward as a single new company and in acquisition the right over other company is acquired. Acquisition (or takeover) is an attempt to acquire the Target Company. Takeovers may be friendly or hostile. Hostile Takeover means the acquisition of one company (called the target company) by another (called the acquirer) that is accomplished not by coming to an agreement with the target company’s management, but by going directly to the company’s shareholders or fighting to replace management in order to get the acquisition approved.