An acquisition is buying/receiving a good or asset through a business transaction or contract. Acquisition most often refers to the sale of property, such as a business. In the acquisition of a business, the buyer, another business entity, will purchase controlling stock/shares or even all of the company’s shares in order to take over the company. The purchasing company becomes the parent company of the subsidiary (seller company), and can then make future business decisions without shareholder approval.
Acquisitions occur between similar businesses and allow for significant market growth. Acquisitions differ from mergers; during an acquisition, both companies remain separate entities, with one company having a controlling interest in the other. For example, Facebook acquired Instagram in 2012 for $1 billion and both individual companies grew dramatically in the social media market, which increased their revenue.
For more information about acquisitions within a business transaction, please see the Wex Mergers & Acquisitions entry.
[Last updated in July of 2024 by the Wex Definitions Team]