Sunday, May 10, 2020

Differences Between Mergers and Acquisitions


Ranjeet Reddy Paladugu biking
Ranjeet Paladugu

Ranjeet Reddy Paladugu started his career in the financial industry in 2000 and served as a financial manager of mergers and acquisitions at Qwest Communications for two years. A successful entrepreneur, Ranjeet Reddy Paladugu is the CEO of Specialty Holdings, an investment firm he founded in 2018.

Mergers and acquisitions are terms used for types of financial transactions that imply a consolidation of assets. A merger legally requires that two companies combine to form a new entity, or that the merger agrees to become part of the acquiring company. In a merger, the two companies typically have similar sizes.

The result of an acquisition, on the other hand, is never a new entity. Typically, acquisitions take place between two companies of different sizes, and the smaller one often ceases to exist when acquired by the larger company. Some of the acquisitions are a result of unfriendly deals, where the purchase is not always wished by the acquired company’s board of directors, shareholders, and employees.