Mergers and Acquisitions (M&A)

Definition

Transactions in which businesses combine or one business buys control of another.

Companies may make a deal to enter a market, add a product, or combine operations. Buyers can pay with cash, shares, or a mix of both. How the deal turns out can depend on the price paid and how well the businesses work together afterward.

Example

Company A buys all of Company B for $50 million. That is an acquisition. If the two companies combine into a single company, the combination can be structured as a merger.