Mergers & Acquisitions

  • Acquisition is every subordination of one company to another, or when one company takes control over another.
  • Merger is a fusion of two or more companies into one, creating a new legal entity.
  • The combined value of the two companies will be greater after the merger (acquisition).
  • What was 1+1=2 before the transaction should be more than 2 after the transaction if the future combined cash flow is greater than the one before the takeover.