Short definition: An acquisition is a corporate transaction where one company purchases another company, usually by buying a majority of its shares or assets.
Explanation: In an acquisition, the acquiring company gains control of the target company’s operations, assets, and liabilities. Acquisitions can be friendly, where both companies agree to the terms of the deal, or hostile, where the acquiring company makes an unsolicited bid for the target company.
Example: A well-known example of an acquisition is Facebook’s purchase of Instagram in 2012 for $1 billion.
Additional information (optional): Acquisitions can be motivated by various factors, such as expanding market share, gaining access to new technologies or capabilities, or eliminating a competitor. The success of an acquisition depends on various factors, including the strategic fit between the companies, the integration process, and the price paid for the target company.