5 Differences Between Mergers And Acquisition In Businesses You Need To Know

YOGYAKARTA Merger and acquisition are strategies used to develop and maintain the continuity of the company. Nevertheless, mergers and acquisitions are two different business strategies. The most obvious difference between mergers and acquisitions is in terms of the company's existence.

At the merger, the two companies will unite into new companies. Meanwhile, in the acquisition, companies that take over and take over will not lose their existence. In other words, the acquired company will belong to the acquisition.

In addition, what are the differences in mergers and acquisitions? Before answering these questions, it's a good idea to know what is meant by mergers and acquisitions. Let's look at the following article.

The definition of merger and acquisition is contained in Law Number 11 of 2020 concerning Job Creation which amends a number of provisions in Law Number 40 of 2007 concerning Limited Companies.

Article 109 paragraph (9) of the law explains that mergers or mergers are legal acts committed by one company or more to merge with other existing companies that result in the activities and pasiva of the company which combines itself to switch because the law to the company accepts the merger and then the status of the company's self-incorporating legal entity ends because of law.

Meanwhile, what is meant by the acquisition or takeover is legal acts committed by legal entities or individuals to take over the company's shares which resulted in the transfer of control over the company.

The above has been mentioned that differences in mergers and acquisitions can be recognized through the existence of the company. In addition, there are still several other things that distinguish mergers and acquisitions, including:

1. Activate and pasiva

In the merger, the company's incorporating assets and pasiva will be fully transferred to the company that accepts the merger.

In the acquisition, the company's assets and services taken over are still with the company being taken over by its shares.

It should be noted that the assets are all owned by companies which are usually stated in money units. The assets are also known as assets. While the pasiva are all obligations and equity that are included in the listed list or company obligations, whether short or not.

2. Shareholders

The difference between the merger and the next acquisition is in terms of shareholders. At the merger, the merged company's shareholders will belong to the company that accepts the merger.

Meanwhile, in charge, shareholders switched from the original shareholders to those who took over.

3. Legal entity status

The difference in mergers and acquisitions in terms of legal entity status, the company that combines itself will disappear and end its status as a legal entity without going through the liquidation process.

Meanwhile, in the acquisition, the company that was taken over by its shares, its legal entity did not disband, only the transfer of control to the company occurred.

4. Company name

Another thing that makes the difference between mergers and acquisitions is the name of the company. In the merger, two companies joined into new companies. Meanwhile, in the acquisition, the company that acquired it still had the previous company name.

5. Operation

The difference between the merger and the previous acquisition can be recognized in terms of the company's operations. In the merger, the operational capacity of the new company will be typical of the previous company. This can happen if the two companies that carry out the merger have the same capacity.

However, companies experiencing acquisitions are generally carried out by large companies to get smaller companies. So that in terms of operations, it could be different and follow directions from companies that carry out acquisitions or takeovers.

That's information about differences in mergers and acquisitions. Hopefully this article can add insight to the loyal readers of VOI.ID.