Company M&A is also called business combination. The purpose of investor M&A is usually to obtain the assets, technology, management rights or market of the target company, usually by purchasing the assets or equity of the target company, which is also commonly known as "asset acquisition" and "equity acquisition".
M&A refers to two or more independent enterprises, which merge into one enterprise, usually a dominant company merges one or more companies. The connotation of M&A is very extensive, generally referring to mergers and acquisitions. Merger, also known as absorption merger, means that two different things merge into one for some reason. Acquisition refers to the purchase of shares or assets of another enterprise by an enterprise with cash or securities in order to obtain the ownership or control of all assets or an asset of the enterprise. Another concept related to the meaning of M&A is merger)-refers to the merger of two or more enterprises into a new enterprise, and after the merger, multiple legal persons become one legal person.
The essence of M&A is a kind of right transfer behavior in the process of enterprise control right movement, which is made by all right subjects according to the institutional arrangement of enterprise property rights. M&A activities are carried out under certain conditions of property rights system and enterprise system. In the process of M&A, one or a part of the right holders get corresponding benefits by transferring the control right of the enterprise, while another part of the right holders get this control right at a certain cost. The process of enterprise merger and acquisition is essentially a process in which the subject of enterprise rights changes.
The most basic motivation of M&A behavior is to seek the development of enterprises. Enterprises seeking expansion are faced with two choices: internal expansion and development through mergers and acquisitions. Internal expansion may be a slow and uncertain process, and it will develop much faster through mergers and acquisitions, although it will bring its own uncertainty.