Corporate Acquisition Law and Legal Definition

Corporate acquisition is a take over of one corporation by another if both parties retain their legal existence after the transaction. For example, if “Corporation X” buys 51% or more of “Corporation Y”, then “Corporation Y” becomes a subsidiary of “Corporation X.” Acquisitions occur in exchange for cash, stock, debt, or some combination. Acquisitions can be friendly or hostile. A friendly acquisition occurs when the board of directors supports the acquisition and a hostile acquisition occurs when the board of directors does not support the acquisition.