What Is A Difference Between Merger,joint Venture And Acquisition?


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Christopher Profile
Christopher answered
What mergers, joint ventures and acquisitions all have in common, is that they each involve the dramatic restructuring of a company or organization, but in very different ways. A merger refers to an agreement between two companies to combine their resources, in order to arise as a more powerful and dominant marker player. For example, when Air France and KLM-Royal Dutch Airlines merged in May 2004 to form the Air France-KLM group, they automatically became continental Europe's largest carrier. This merger, however, turned out to be more of an acquisition, in that Air France remains the dominant player in the holding company, and the firm is based at the Paris Charles de Gaulle Airport, rather than in Amsterdam.

A joint venture, in contrast, is when two otherwise independent companies or entrepreneurs join forces in order to cooperate on a common project or in providing a specific service. In many cases, a new firm or organization is actually created, and both of the independent founders have a stake in this joint company. All revenue which is not re-invested into the firm is then divided between the founders. A good example of a joint venture is Verizon Wireless. In this case, Verizon teamed up with Vodafone to provide a mobile communication service.

An acquisition is simply when a more dominant company purchases a smaller firm, which also happens to be a competitor. By removing a key competitor from the market, the larger company increases its dominance. For instance, in October 2008 Delta Air Lines bought Northwest Airlines, and as such, it will eventually phase out the latter's independent brand name.
Edmond Becca Profile
Edmond Becca answered

Merger Meaning, A transaction where two firms agree to integrate their operations on a relatively co-equal basis because they have resources and capabilities that together may create a stronger competitive advantage. The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. For example: Company A+ Company B= Company C.

Acquiaition, A transaction where one firms buys another firm with the intent of more effectively using a core competence by making the acquired firm a subsidiary within its portfolio of business. It also known as a takeover or a buyout. It is the buying of one company by another. In acquisition two companies are combine together to form a new company altogether. For example: Company A+ Company B= Company A.

Meaning of joint venture, is the co operation of two or more individuals or business in which each agrees to share profit, loss and control in a specific enterprise.

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