What is one characteristic of an acquisition?

The characteristic that an acquisition often involves one company absorbing another is fundamental to understanding how acquisitions function in the business landscape. In an acquisition, one company purchases the assets or stock of another company, which results in the acquired company becoming part of the acquiring company. This process leads to the acquired entity being fully integrated into the acquiring organization, often leading to a rebranding or consolidation of operations under the prevailing company’s name and management.

This absorption distinguishes acquisitions from mergers, where two companies typically come together to form a new entity, suggesting a more equal partnership rather than a unilateral absorption. While some acquisitions can be amicable, they are not always friendly or based on equal power dynamics, contrasting with the characteristics noted in the other options. Furthermore, the nature of acquisitions means that one company usually takes on the leading role, making equal sharing of power and friendly agreements less common in this context.