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.