The Difference Between a Merger and an Acquisition Is

question 55

Multiple Choice

The difference between a merger and an acquisition is

• A) that a merger involves one company purchasing the assets of another company with cash,whereas an acquisition involves one company becoming the owner of another company by buying all of the shares of its common stock.
• B) that a merger is the combining of two or more companies into a single corporate entity (with the newly created company often taking on a new name)whereas an acquisition is a combination in which one company,the acquirer,purchases and absorbs the operations of another,the acquired.
• C) basically a play on words-in both instances,two companies become one.
• D) that the brands of both companies are retained in a merger whereas with an acquisition there is only one surviving brand name.
• E) that a merger involves two or more companies deciding to adopt the same strategy whereas an acquisition involves one company becoming the owner of another company but with each company still pursuing its own separate strategy.

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Definitions:

Reducing Quality

The process of lowering the quality of products or services, often as a cost-cutting measure, which can negatively affect customer satisfaction and brand reputation.

Limiting Availability

A strategy to increase desirability or price of a good or service by reducing its availability.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Demand

The volume of goods or services that purchasers are ready and financially able to acquire at several price points within a certain period.