What is an acquiree?
In a business acquisition the acquiree is the company that is being bought. It's also called the target company. For the acquiree, an acquisition by a larger company could offer a higher return for its shareholders or it could provide extra capital to cover liabilities or fund expansion.
Where have you heard about acquirees?
Although the term acquiree may not be commonly used outside the world of mergers and acquisitions, the financial press is full of stories about the latest businesses being taken over. Although it is the large takeovers that dominate the news, acquisitions are far more common in small and medium sized business.
The world's largest takeover was the takeover of acquiree Mannesmann by acquirer Vodafone Group in 1999 and was worth $202bn.
What you need to know about acquirees.
In a friendly acquisition, the management and directors of the acquiree company agree to the sale. The board of the target company will publicly agree on the terms once an offer of cash or stock is made and accepted.
In a hostile takeover the acquiring company may try to get around an unreceptive board of directors at the acquiree company by issuing a tender offer directly to the shareholders to purchase their shares above their market value and take a majority stake in the company.
After an acquisition, the price of the acquiree shares will usually move. Typically, they will go up but they could also go down depending on the price that was paid for the shares by the acquiring company.
Find out more about acquirees.
Find out about golden parachutes and how these contracts can entitle key executives to benefits should their firm be taken over by another company.