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Difference between acquisition and takeover

Vimala (ipcc) (39 Points)

12 October 2012

Can anyone explain the difference between Acquisition and Takeover

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T S D ( ) (236 Points)
Replied 12 October 2012

They both have same meaning - "To get the possession"

Still they are differenciated. The basic difference is that :

"Acquisition is to get the possession by agreement" while

"Takeover is to get the possession by force"

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Acquisition refers to the aquisition of the property. it is purchased by one company of controlling interest in the share capital of another existing company. aquisition can be sought for verous reasons like growth orientation, access to raw-materials, technology, cheaper labour, innovations etc.

Whereas takeover is inorganic corporate growth device whereby one company acquires control over another company. takeover usually take place when shares are aquired or purchased from the shareholders of the company at a specified price to the extent of at least controlling interest in order to gain control of that company

thanks

CA Manish (Job) (5264 Points)
Replied 12 October 2012

There is no tangible difference between these two terms both can be used interchangeably.

Mainly takeover is used to refer a hostile takeover where the company being acquired is resisting. In contrast, acquisition is frequently used to describe more friendly acquisitions, or used in conjunction with the word merger, where both companies are willing to join together.

Vimala (ipcc) (39 Points)
Replied 12 October 2012

Thanks for your reply

deepali agarwal (Company Secretary) (1289 Points)
Replied 12 October 2012

here is no tangible difference between an acquisition and a takeover; both words can be used interchangeably - the only difference is that each word carries a slightly different connotation. Typically, takeover is used to reference a hostile takeover where the company being acquired is resisting. In contrast, acquisition is frequently used to describe more friendly acquisitions, or used in conjunction with the word merger, where both companies are willing to join together.

An acquisition or takeover occurs when one company purchases another. Companies perform acquisitions for various reasons: they may be seeking to achieve economies of scale, greater market share, increased synergy, cost reductions or for many other reasons. The acquiring company would usually proceed with the corporate action by offering to purchase the shares from the shareholders of the target company. Often, a cash offer is made but sometimes the acquiring company may offer to trade its own shares in exchange for the target company's shares. Also, the difference between mergers and takeovers/acquisitions are that mergers involve two companies of roughly equal size that have decided to combine together to take advantage of expected advantages of a being larger company