Company Acquisitions in Today’s Business Environment

Eric Fornell

Eric Fornell

A graduate of Oxford University and Amherst College, Eric Fornell is the vice chairman of investment banking at Wells Fargo Securities, New York. Tasked with providing financial support to Wells Fargo clients in the energy and utility industries across North America, Eric Fornell played a lead role in advising TransCanada PipeLines Limited in its acquisition of Columbia Pipeline Group.

In an acquisition, one company takes over most or all of another company’s ownership. The company taking ownership is called the acquiring company, while the company being acquired is called the target company.

An acquisition is said to have occurred when the acquiring company purchases more than 50 percent of the target company. This ownership is evidenced by control of the target’s assets or stock. The goal of the acquiring company may be to increase market share, expand its product offerings, or expand its asset base.

Acquisitions may be either friendly or hostile. In friendly acquisitions, the target company agrees to be acquired and plays a role in ensuring the completion of the purchase. In hostile acquisitions, the target does not agree to be acquired and the acquiring firm often resorts to aggressive tactics to complete the acquisition.