Acquisition
An acquisition is a purchase or other transaction through which a buyer gains control of a target or acquires specified assets. The structure may involve shares, assets, cash, securities or a combination. Evaluate the target's stand-alone value, synergies, integration costs, financing, tax and risks as well as whether the buyer can implement its plans. A bid can be recommended by the target board or pursued against its wishes, subject to applicable rules. Financial valuation and IFRS business-combination accounting address different questions.
Worked example
A buyer values a target at $40 million on a stand-alone basis and expects $8 million net synergy. A $45 million purchase price leaves $3 million estimated benefit to the buyer before any omitted costs or risks.
Common mistake
Calling every purchase of a minority shareholding a takeover or assuming a positive combined synergy necessarily benefits the buyer after the premium.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Direct | September 2026–June 2027 |