Acquisition
The process of one company purchasing another company to gain control of its assets, operations, or market position.
Definition
An acquisition occurs when one company purchases most or all of another company's shares to gain control of that company. Acquisitions are a common exit strategy for startups and a growth strategy for larger companies seeking to expand their capabilities, market reach, or eliminate competition.
Types of Acquisitions
Asset Acquisition
Purchasing specific assets rather than the entire company
Stock Acquisition
Purchasing shares to gain control of the company
Strategic Acquisition
Acquisition for strategic business reasons
Real-World Example
Tech Acquisition: Facebook's acquisition of Instagram for $1 billion in 2012
Facebook acquired Instagram to expand its mobile presence and eliminate a potential competitor in photo sharing.