International Business: An Asia Pacific Perspective, Second Edition

8. International Acquisitions

An acquisition, also referred to as a “takeover” or “buyout,” occurs when one company (the acquirer) purchases another company (the target) and establishes itself as the new owner. A merger is the combination of two legally separate firms into a single new firm. Cross-border mergers and acquisitions (M&As) are those M&As that involve an acquirer firm and a target firm whose headquarters are located in different home countries.¹

The defining difference between mergers and acquisitions lies in the fact that in a merger the merged firms are dissolved and fold their assets and liabilities into a new firm, while in an acquisition the target company dissolves but the acquiring company remains and takes over the target ...