What is an Acquisition?

An acquisition is the process by which one company purchases most or all of another company’s shares or assets in order to gain control of that company. The acquiring firm, often referred to as the “parent” or simply “buyer”, takes ownership of the wanted company’s operations, employees, resources, suppliers, and debts, usually with the goal of expanding market reach, acquiring new technology, or increasing profitability. Unlike a merger, where two companies of relatively similar size and power combine to form an entirely new entity, an acquisition involves one company absorbing another, with the acquired company ceasing to exist as an independent organization.

Acquisitions are typically pursued by larger or more financially stable firms looking to grow rapidly, enter new markets, or eliminate competition. For example, a major automotive tech corporation might acquire a smaller mechanics business to gain access to new customer bases and grow its territory. The process of an acquisition generally follows a structured timeline that includes several different stages, strategy and identification of targets, due diligence, negotiation of terms, approvals, and finally, integration of the acquired company into the parent organization. Depending on the size and complexity of the deal, this process can take anywhere from several months to over a year to complete.

Acquisitions are powerful tools for business growth and diversification, but they also carry significant risks, including cultural clashes, overvaluation, and integration challenges. When managed effectively, however, an acquisition can provide long-term strategic advantages, new capabilities, and increased market share for the acquiring company. If you are interested in our services or need more information about acquisitions, please call The Center at (618) 997-3436.