Definitions by Polina Kharchenko, Finance

Sentence Definition

The phrase mergers and acquisitions, often abbreviated M&A, is the financial concept, used in the modern business world for describing the ways of the ownership transferring from one company to another.

Extended Definition

A merger, a part of the notion M&A, is the financial process, when two or more companies join together to form a new company, which assumes all the rights and obligations of the previously existed companies. For example, if a company A joins with the companies B and C, a new company D (D = A+B+C) appears in the market, whereas all the other company are liquidated. Another part of the M&A concept is an acquisition, or takeover, which is a financial notion, used to describe the process of the buying of a small company by a larger one. For example, if a company A acquires a company B, only the company A remains in the market. An acquisition can be realized through the purchase of all shares or all assets of the target company.