Acquisition - Definition & Advantages of Acquisition

Understanding Acquisition

Acquisition involves one company buying another to gain its assets. It often aims at expanding customer base, enhancing products or services, and improving financial stability. 

Acquisition Categories

Acquisition types include vertical, horizontal, conglomerate, and congeneric. 

1. Vertical: A company buys another at a different production stage. 

2. Horizontal: A company acquires another within the same industry. 

3. Conglomerate: A company takes over another from a different industry. 

4. Congeneric: A company purchases another in a related industry but with different business lines. 

Acquisition Benefits

Acquisitions offer quick, cost-effective business growth. It helps in market expansion, solidifying market position, and diversifying business risk. 

Selecting the Right Company for Acquisition

Choosing the right acquisition involves considering the company's suitability for your business, as well as financial healthiness, including debt levels and future growth prospects. 

Summary

Acquisition, a method of buying another business, offers quick growth, market expansion, and access to new technologies. Proper planning and due diligence can help manage acquisition-associated risks.