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Acquisition occurs when one company takes over another and clearly establishes itself as the new owner. This comes into play often when a larger firm absorbs a smaller one.

A merger happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a 'merger of equals'.

Due Diligence refers to an investigation, audit, or review performed to confirm the facts of a matter under consideration. In the M&A process, it is the detailed investigation prior to signing a contract, or an act with certain standard of care.

A hostile takeover is the acquisition of one company by another without approval from the target company's management. This usually occurs by going directly to the company's shareholders or fighting to replace management in order to get the acquisition approved.

A friendly takeover occurs when a company's management and board of directors agree to be acquired by another company. The process is collaborative and amicable.

A leveraged buyout is the purchase of another company using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans.

Synergy refers to the idea that the value and performance of two companies combined will be greater than the sum of the separate individual parts. Synergies may arise in M&A transactions when efficiencies are created between the two entities.

A White Knight is a friendly investor or company that acquires a corporation on the verge of being taken over by a hostile bidder or predator. The White Knight is seen as a savior of the target company.

A Golden Parachute is a provision in an executive's contract that offers the executive lucrative benefits in case of termination, including benefits triggered by a merger or acquisition.

A poison pill is a defense strategy used by a target company to deter or prevent a hostile takeover by making its stock less attractive to the acquirer. This can be done by issuing new shares to existing shareholders, thus diluting the hostile acquirer's interest or other means.

A buyout is the acquisition of a company's controlling interest, where the acquirer gains ownership control over the assets and operations. Buyouts commonly occur when a company is looking to exit the market or in LBO scenarios.

Consolidation in M&A refers to the merger of several small companies into a larger entity. Consolidation combines market share, reduces competition, and can lead to economies of scale.

A tender offer occurs when one company offers to purchase the outstanding stock of another company at a specific price rather than buying the company outright. Shareholders must decide whether to take the offer or not.

A Material Adverse Change clause in M&A agreements allows a buyer to back out of a deal if significant, unforeseen changes occur within the target company that negatively affect its value. It serves as protection for the buyer.

A vertical merger involves the combination of two or more companies that operate at different levels within the industry's supply chain. This type of merger can increase efficiency and reduce production costs.

A horizontal merger occurs between companies operating in the same industry and is usually part of consolidation to reduce competition, extend product lines, or enter new markets.

A roll-up strategy is a tactic used by a buyer where multiple small companies in the same market are consolidated into a single and larger entity. This strategy aims to reduce costs through economies of scale and increased market share.

An earnout is an agreement by the acquirer to pay additional future compensation based on the target's future performance post-acquisition. It aligns the seller's and buyer's interests by linking payment to the continued performance of the business.

A crown jewel defense is an anti-takeover strategy where the target company sells off its most valuable assets, the 'crown jewels,' to reduce its attractiveness to the hostile bidder.