Define an acquisition:

Define an acquisition:

• A. When two firms merge to form a larger company
• B. When one business buys another to have control and use their resources
• C. When one business expands into a new industry
• D. When a company sells a division

Answer: (B)

An acquisition is when one business buys another to gain control and use its resources. The buying company takes ownership and can integrate the target’s assets, people, and operations, often keeping the buyer as the continuing entity while the other becomes a subsidiary or is absorbed. This is different from a merger, where two firms combine to form a new company. It also isn’t about expanding into a new industry (that’s diversification) or selling a division (divestment).

An acquisition is when one business buys another to gain control and use its resources. The buying company takes ownership and can integrate the target’s assets, people, and operations, often keeping the buyer as the continuing entity while the other becomes a subsidiary or is absorbed. This is different from a merger, where two firms combine to form a new company. It also isn’t about expanding into a new industry (that’s diversification) or selling a division (divestment).