An acquisition is where one company (the predator) buys the share capital of another company (the target or victim); creating a parent and subsidiary in a group. Both companies continue to exist as legal entities.
　　A merger is where two companies of similar size cancel their share capital and pool their net assets together into a new entity. The new entity then issues shares to the previous shareholders in an agreed ratio.
　　For financial management whether the transaction is classified as an acquisition or as a merger is not usually critical. It is often a more important distinction for financial reporting where merger accounting tends to report better results than acquisition accounting—although International Financial Reporting Standards no longer permit merger accounting due to past abuses.
　　Advantages of Acquisitions
　　Speed — often quicker than organic growth.
　　Entry costs — if the cost of entering a new market is high it may be better to acquire a business already operating in that market.
　　Barriers to entry — acquisition may be the only method of entry into a new market.
　　Risk — organic growth may be riskier than acquiring an existing business.
　　Undervaluation — "asset stripping" may be possible in an acquisition.
　　Disadvantages of Acquisitions
　　Cost — the control premiums paid over the existing market price are considerable, typically over 40%.
　　Shareholder wealth — if the bidder pays too high a price for the target company this will reduce the bidding company shareholders' wealth.
　　May attract the attention of regulatory authorities if there are concerns about damage to the public interest.

 　　ACCA官方微信　　　　
　　扫一扫微信，*9时间获取2014年ACCA考试报名时间和考试时间提醒
　　
　　高顿网校特别提醒：已经报名2014年ACCA考试的考生可按照复习计划有效进行！另外，高顿网校2014年ACCA考试辅导高清课程已经开通，通过针对性地讲解、训练、答疑、模考，对学习过程进行全程跟踪、分析、指导，可以帮助考生全面提升备考效果。
　　
　　报考指南：2014年ACCA考试备考指南
　　免费题库：2014年ACCA考试免费题库
　　考前冲刺：ACCA备考秘籍
　　高清网课：ACCA考试网络课程