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On January 1, 2014, Doone Corporation acquired 60 percent of the shares of XYZ Company. What type of business acquisition does this represent?

a) Merger
b) Hostile takeover
c) Joint venture
d) Stock acquisition

User Installero
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1 Answer

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Final answer:

Doone Corporation's acquisition of 60 percent of XYZ Company's shares on January 1, 2014, represents a stock acquisition, meaning Doone Corporation has gained controlling interest in XYZ without the two companies necessarily merging into a single entity.

The Correct Option is; d) Stock acquisition

Step-by-step explanation:

On January 1, 2014, Doone Corporation's acquisition of 60 percent of the shares of XYZ Company represents a stock acquisition.

This type of business acquisition is different from a merger in that a merger involves two firms of equal power and status joining together, whereas an acquisition, in this context, refers to one firm purchasing a significant, controlling percentage of another firm without necessarily merging the two into a single entity.

The acquired company in an acquisition may continue to operate under its former company name, whereas a merger typically results in a single, unified company. This acquisition does not represent a joint venture, as that would imply shared control and collaboration without a change in company ownership, nor does it imply a hostile takeover, as the nature of the acquisition is not specified as being against the will of the target company's management.

User Erechtheus
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