BREAKING DOWN 'Acquisition'
A form of takeover, an acquisition occurs when a buying company obtains more than 50% ownership in a target company. The approach is often used to increase market share, add new niche offerings or increase the overall amount of business assets. As part of the exchange, the acquiring company often purchases the target company's stock and other assets, which allows the acquiring company to make decisions regarding the newly acquired assets without the approval of the target company’s shareholders.