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What sets apart an acquisition from a merger?

As a business owner in Georgia, you have many expansion options set before you. Two of the most common ways of taking on valuable parts of another company are mergers and acquisitions. Here, we take a look at the difference between those two.

First of all, Investopedia defines a business acquisition as the purchase of another company’s ownership. Most times, you’ll be paying in cash for this. Sometimes you may also pay in the stock of the company you’re acquiring, or it may be a mix of the two. You will have control over the company in this way and can grow yours without worrying about expanding alone. Normal targets of acquisitions include complementary businesses, or ones that operate in the same line of work.

By comparison, a merger is more reliant on equal divisions. All companies involved in a merger have a say when it comes to the interests that the new combined company will pursue. Acquisitions do not result in a new company. This is unlike mergers, where both of the combined companies will make up a new entity. The focus is on combining strengths, skills, resources and personnel in order to achieve a better, bigger business, rather than simply on the growth of the initial business.

Both options allow for you to expand and grow your current business. It just depends on whether you would like to continue with your own business and grow that, or if you would like to cooperate with a different business to become something new.

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