Acquisition is the purchase of one company by another in order to fulfill particular strategic goals related to revenues, market share, product/ service offerings, or competition.

Organizations consider merger and acquisition proposals in a systematic manner, so that the marriage will be mutually beneficial, a happy and lasting affair. Acquisitions and mergers are resorted to for purposes of achieving a measure of synergy between the parent and the acquired enterprises.

Synergy may result from such bases as physical facilities, technical and managerial skills, distribution channels, general administration, research and development and so on. Only positive synergistic effects are relevant in this connection which denote that the positive effects of the merged resources are greater than the some of the effects of the individual resources before merger or acquisition.