M&A (mergers and acquisitions)

Companies combining into one, or one company buying another

In detail

M&A covers mergers, where two or more companies become one, and acquisitions, where one company buys enough of another's shares to take control. Companies do it to expand, to gain technology or people, or to take over a business that has no successor. Buying a listed company often uses a tender offer, buying shares outside the market at a set price. The offer price is usually set above the market price that came before.

Example

Offering $1,300 a share for a company trading at $1,000 is a premium of 30%.

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