What does Acquisition mean in business?
The acquisition is the process when a company buys the majority or all the shares of another company.
The goal of the acquisition can be:
- To enter a foreign market – If a company wants to expand to another country, it might be easier to buy a company with an already working infrastructure instead of building one up from the ground
- Part of a growth strategy – The buyer can increase their market share or enter new markets
- To gain new technology – If the company sees a new, desirable technology, they can choose to acquire the business that is using it. This way, you do not only gain access to new technology, you can also prevent the other company from becoming a stronger competitor.
- It can be a result of a successful exit strategy, where the founders of the company want to monetize the success of their business.