One of the concepts we have heard more and more in recent years is “merger and acquisition”. These terms, which are commonly used together, and are almost never used alone in daily life, are separated from each other in financial and legal aspects.
The concepts of merger and acquisition are originally in English and abbreviated as M&A and it refers to the purchase and sale processes of two or more companies in the simplest and practical way.
When we examine these concepts more closely;
Mergers, that two or more companies join forces in line with a set of strategic and financial objectives to form a new corporate identity and, as a rule, continue to have equal shares (or capital distribution). In other words, two or more companies are melted in a pot and transformed into a stronger single company. It is a typical example that the merger of Daimler and Chrysler companies in 1998 under the same roof as Daimler-Chrysler.
The acquisition is to purchase all or part of a company's shares and assets by another company. There is a mutual share/ownership exchange between the buyer and the seller. The company that buys the shares has a voice in the share of the company. This ratio is usually more than 50%, and the new owner of the company becomes the dominant shareholder. In 1999, when the British telecom giant Vodafone bought the German telecommunications company Mannesmann for $ 202,785 billion, it was the biggest purchase of all time. With this acquisition, Vodafone dominated Mannesmann's total share of 99.1%.
Although there is no clear statistical data, it is estimated that the vast majority of M & A's are realized as an acquisition. On the other hand, mergers are much less common compared to acquisitions.
