Startup Dictionary
Acquisition
Definition
When one company purchases most or all of another company's shares to gain control of that company.
Deep Dive
Acquisition is a corporate strategy where one company purchases most or all of another company's shares to gain control of that entity. This strategic move is typically driven by a desire to achieve various objectives, such as expanding market share, acquiring new technologies or intellectual property, gaining access to a new customer base, eliminating a competitor, or leveraging the target company's talent pool. The acquiring company often seeks to integrate the acquired business into its existing operations to realize synergies and enhance overall value.
Examples & Use Cases
- 1Facebook (now Meta) acquiring Instagram in 2012 to consolidate its position in the social media market and integrate photo-sharing capabilities into its ecosystem.
- 2Microsoft acquiring LinkedIn in 2016 to expand its professional networking capabilities and integrate it with its enterprise software offerings.
Related Terms
MergerDue DiligenceSynergy