In my first day in the M&A class, my teacher, Professor Rodrigo Olivares Caminal, asked the class a simple question – what is the difference between an acquisition and a takeover? More than 20 students attempted to answer this question without success. This is a simple but yet very fundamental question that goes to the root of the transaction. Yes, I know you may be thinking that the answer to this question is really straightforward. I agree that it is, however, many M&A writers, teachers and/or practitioners appear to have a view which may not be entirely correct.

M&A practitioners (also known as deal practitioners) use a lot of fancy words which add to the flare and grace of deal making. However, the meanings ascribed to these words may become imprecise and, in some cases (at least amongst non-deal practitioners) lost from their usage. Knowledge of the precise meaning of these deal terms is important especially for business owners who have need to embark on business purchase, sale or combination. It is also important for deal practitioners at all levels to understand the precise meaning of these deal terms so that they can better add value to the deal ecosystem.

The purpose of this paper is to analyse few terms and concepts frequently used in the M&A space, in order to provide you with a firm grasp of their meanings and ensure that you better appreciate deal nuances. In the following sections, we will identify a list of terms and concepts, and will try to define them with examples from concluded deals and existing laws.

The Terms and Concepts

a. Acquisition


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