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ALSO SEE: merger

An acquisition is the purchase of one company by another. In a "friendly" acquisition, companies cooperate in negotiations and come to an agreement on terms. The acquiring company assumes control of the target company, usually paying in cash, the acquirer's stock, or a combination of the two.

Most acquisitions involve a larger company buying a smaller one. Sometimes a smaller firm will take over the management of a larger one; this is called a reverse takeover.

A hostile acquisition is sometimes called a takeover. In this case, the target company does not want to be bought.