What does acquire mean?

A business acquires another by buying a majority stake in that company. By acquiring more than 50% ownership, the acquiring company effectively takes control of the target company and does not need to have other stakeholders' consent in order to make decisions about the company's future or direction.

Where have you heard about acquiring?

The business pages of newspapers will often have a dedicated section for mergers and acquisitions. The deals that make the main headlines are often the most contentious, like the proposed takeover of Sky TV by 21st Century Fox, which critics argue would concentrate too much control of the British media in one company's hands. The biggest merger known to-date is the AOL-Time Warner merger at $186.2 billion.

What you need to know about acquiring.

Although the terms merger and acquisition are often used interchangeably there is a key difference between two companies that merge together and one company that acquires another.

In an acquisition, one company takes over the other. Once bought, the target company ceases to exist from a legal point of view and is instead swallowed up by the acquiring company.

In a merger, two companies, often of a similar size, join together to form a single new company. The two companies both cease to exist and stock is issued for the new company.

However, there are actually few mergers of equals; normally one company will acquire the other. The deals are often described as mergers though because being bought out can carry negative connotations for the target company.