Acquisition
The purchase of one company by another, where the acquiring company takes control of the target business.
Full Definition
An acquisition occurs when one company purchases another company and takes control of its operations, assets, and liabilities. In the UK M&A market, acquisitions can be structured as share purchases (buying the company's shares) or asset purchases (buying specific assets and liabilities).
The acquiring company becomes the new owner and can integrate the target into its existing operations, run it as a subsidiary, or merge the two entities. Acquisitions can be friendly (with board approval) or hostile (against board wishes).
Key considerations in UK acquisitions include:
- Competition and Markets Authority (CMA) review for significant transactions
- Employment law implications under TUPE regulations
- Tax structuring and stamp duty implications
- Due diligence requirements
Related Terms
Merger
The combination of two companies into a single entity, typically structured as equals or near-equals.
Share Purchase Agreement (SPA)
The definitive legal contract governing the sale and purchase of shares in a company.
Asset Purchase
A transaction where the buyer acquires specific assets and liabilities of a business rather than its shares.
Due Diligence
The comprehensive investigation and analysis of a target business before completing an acquisition.