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Mergers & acquisitions

Referring to the aspect of corporate strategy, finance and management that deals with the buying, selling or combining of different companies that can assist a growing company to grow rapidly without having to create another business entity.

Contributors in Mergers & acquisitions

Mergers & acquisitions

Leveraged buyout

Banking; Mergers & acquisitions

Purchase of a company financed primarily by debt.

Liquidity risk

Banking; Mergers & acquisitions

See marketability risk.

Self-tender offer

Banking; Mergers & acquisitions

A tender offer used when a firm seeks to repurchase its stock from its shareholders.

Right of first refusal

Banking; Mergers & acquisitions

A contract clause requiring that a party wishing to leave a joint venture or partnership first offer its interests to other participants in the JV or partnership.

Segmented capital markets

Banking; Mergers & acquisitions

Capital markets exhibiting different bond and equity prices in different geographic areas for identical assets in terms of risk and maturity.

Risk-free rate of return

Banking; Mergers & acquisitions

The return on a security with an exceedingly low probability of default, such as U.S. Treasury securities, and minimal reinvestment risk.

Risk premium

Banking; Mergers & acquisitions

The additional rate of return in excess of the risk-free rate that investors require to purchase a firm's equity. Also called the equity premium.

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