In corporate transactions, what does "acquisition" refer to?

In corporate transactions, "acquisition" specifically refers to the purchase of one company by another, where the acquiring company obtains control of the target company. This definition captures the essence of what an acquisition entails: a transfer of ownership and control whereby the purchasing entity effectively takes over the operations, assets, and liabilities of the acquired company.

This process can occur through various means, such as asset purchases or stock purchases, which grant the acquirer the rights to the target's business. By gaining control, the acquiring company can integrate the target's operations into its own, leverage synergies, and potentially enhance its market position.

The other options do not accurately represent the concept of an acquisition. The sale of a corporation to an independent party may imply a transfer of ownership but does not necessarily involve the obtaining of control in a way recognized as an acquisition. A merger between equal companies does not fit the definition of an acquisition because it suggests a combination rather than a purchase where one company assumes control over another. Lastly, a strategy to divest certain business units reflects a company’s decision to sell off portions of its operations rather than the acquisition of another company. Thus, the correct interpretation of acquisition is embodied in the process of one company purchasing another and gaining control.