What Differentiates a Merger from an Acquisition?

NEW YORK - Oct. 20, 2016 - PRLog -- "As I have mentioned before on numerous occasions to clients, over lunch and too both friends and family these two-financial definitions are regularly lost in translation. As Bergam Shultz is increasingly uncovering within the private retail investment arena is the fact that people are being unwillingly mislead and this can lead to loss of potential investment capital which is not good for man nor beast."

"Simply put an acquisition refers to the takeover of one entity by another, on the other hand a merger occurs when two completely separate entities combine forces in order to create an entirely new and joint venture. A virgin company never emerges from an acquisition; the smaller firm is generally absorbed and hence ceases to exist and its assets in their entirety become part and parcel of the new, larger company. It is quite straight forward when you regard acquisitions as a takeover which generally possess a more negative connotation than a merger. This is the reason and the root of the confusion since regularly acquiring firms refer to an acquisition as a merger even if the truth be known it is not."

He added, "From a legal standpoint, a merger through definition requires two firms to consolidate into a new entity with new ownership and a fresh management structure from individuals from both parties. When an acquisition takes place one company takes over all of the operational and day-to-day management decisions of another. Commonly the interpretive distinction hinges on whether the purchase is hostile, an acquisition or friendly as in a merger."

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