Mergers and Acquisitions – A Primer for Those Who Implement M&A Decisions But Do Not Make Them

By George R. Pilcher

At the very least, readers should gain a new appreciation for the elements of M&A activity, and how they affect • An acquisition is the purchase of one company by another com pany or business entity, where the acquiring company is clearly the new owner, the acquired company ceases to exist from a legal point of view, and the acquiring company’s stock continues to be traded.

• A merger occurs when two inde­pendent companies decide to join forces and go forward as a single new company, rather than as independent entities. Both stocks are surrendered, and new com­pany stock is issued in their place. A good example of such a merger took place when Glaxo Wellcome and SmithKline Beecham merged to form the new entity GlaxoSmithKline. final output. Without referring to a dictionary for strict definitions, the terms “merg­ers” and “acquisitions” have become somewhat blurred in practical usage, although there are still some definite differences: