A transaction or other event that involves an acquisition by an entity (known as an acquirer- an investor entity) of another entity or business (known as an acquired/ acquiree- an investee entity), resulting in obtaining control over it. In addition to an acquirer-acquired type of business combinations, transactions between equal parties (i.e., mergers– or mergers of equals or true mergers) are also classified as such. In other words, the parties to such transactions agree to merge and form a new entity (the merged firm).

An acquisition is a purchase transaction in which an acquirer purchases the net assets or equity interests of a business for a certain amount of cash amount and/ or shares. Control can also be obtained through the execution of a contract, or an action by the acquiree, or without the payment of consideration, or through combination of a number of entities to form a single entity (mergers).