What term describes the process in which one organization buys another organization?

What term describes the process in which one organization buys another organization?

• A. Merger
• B. Acquisition
• C. Takeover
• D. Purchase

Answer: (B)

Acquisition is the process where one organization gains control of another by purchasing a majority of its equity or its assets. The acquiring company continues to exist and often absorbs the other company, which may become a subsidiary or be fully integrated. This clearly describes the act of one organization buying another. This differs from a merger, where two companies combine to form a new, single entity rather than one surviving and absorbing the other. A takeover is a form of acquisition, typically highlighting the act of taking control (and can be hostile), but it’s still an acquisition. Purchase is a broader term that can refer to buying goods or assets in many contexts and isn’t specific to acquiring and controlling an entire business.

Acquisition is the process where one organization gains control of another by purchasing a majority of its equity or its assets. The acquiring company continues to exist and often absorbs the other company, which may become a subsidiary or be fully integrated. This clearly describes the act of one organization buying another.

This differs from a merger, where two companies combine to form a new, single entity rather than one surviving and absorbing the other. A takeover is a form of acquisition, typically highlighting the act of taking control (and can be hostile), but it’s still an acquisition. Purchase is a broader term that can refer to buying goods or assets in many contexts and isn’t specific to acquiring and controlling an entire business.