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COPYRIGHT 2005 Information Today, Inc.
IN the business world, mergers and acquisitions are a common occurrence. Some make major headlines. Just think of the AOL-Time Warner deal or the proposed merger of America West and US Airways. Others are of interest to a relatively small group of people. In the case of Sirsi acquiring Dynix, it's librarians.
Mergers happen when two companies pool their interests to become one company. An acquisition is when one company (the acquirer) takes over another (the target). Acquisitions can be friendly, meaning both companies want the acquisition to occur, or unfriendly, hence the phrase "hostile takeover." Consolidations are slightly different from mergers in that the resulting company is a new entity. M&A activity need not involve entire companies. One company may acquire only a division, subsidiary, regional branches, or some other piece of another company.
Many reasons trigger a company's urge to merge. It can involve a need for cash, the desire to expand its customer base, the advantages of the other company's technology, or bragging rights to being the biggest (which, in some peoples' eyes, still equates to...
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