Acquisition is the process by which one company becomes the owner of another through a variety of statutory or non-statutory means. Acquisition is an important business strategy that helps companies grow by increasing market share, expanding product lines, or eliminating competition. It can also be used to enter international markets, bypassing regulatory challenges and local customer demands. For example, Lockheed Martin acquired Sikorsky Aircraft to expand its range of military rotary-wing aircraft.
During the acquisition process, due diligence is done on both sides to determine if the deal is beneficial for both parties. Several key metrics must be examined, including the target company’s debt load and any ongoing legal disputes. It’s also important to identify any potential risks that could have an impact on the company after the acquisition.
The acquisition process can take months or even years, and there are often a lot of low-level details that need to be investigated and included in the final agreement. This can lead to a great deal of lawyer hours, and the final acquisition document may be hundreds of pages long.
The government’s procurement process is heavily influenced by the need for corporate social responsibility and fair practices. To ensure that all contractors are given a chance to compete, procurement policies are in place to protect public money from cronyism and unfair practices.
About the Author
