Acquirer definition
/What is an Acquirer?
An acquirer is an entity that obtains a majority interest in another business. This majority interest arises through an acquisition transaction, where the acquirer pays some form of consideration to the owners of the acquiree in exchange for their ownership interest. This transaction may result in some residual minority ownership of the acquiree by other parties.
An acquirer typically has larger sales and/or headcount than the acquiree, and has access to more financing than the acquiree. This gives it enough organizational heft to successfully complete the acquisition, and enough cash to satisfy the acquiree’s shareholders.
Understanding the Acquirer
An acquirer purchases other businesses for a variety of reasons. The main reason is because it believes it can gain value from the deal. This can be accomplished by acquiring valuable assets of the acquiree, such as its production capacity, skilled employees, or intellectual property. It may be counting on integrating the acquiree’s products into its product line, or to use the acquiree’s distribution network in areas where the acquirer does not currently sell its products.
An acquirer may also buy another business because it wants to deny competitors access to the acquiree. This is a blocking move that does not directly bring value to the acquirer, but will prevent others from more effectively competing with it.
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Example of an Acquirer
An example of an acquirer is The Walt Disney Company. Over several decades, Disney has strategically acquired numerous prominent companies to enhance its content portfolio, expand its audience reach, and strengthen its competitive market position. One of the most significant acquisitions occurred in 2006, when Disney acquired Pixar Animation Studios for approximately $7.4 billion. Pixar, a leader in innovative computer-animated films, was known for hits such as "Toy Story," "Finding Nemo," and "The Incredibles." Following this deal, Pixar became a subsidiary of Disney, enabling the parent company to enhance its animation capabilities, creative talent, and intellectual property portfolio. Additionally, Disney further solidified its role as an influential acquirer through subsequent major acquisitions, including Marvel Entertainment in 2009, Lucasfilm (the company behind Star Wars) in 2012, and 21st Century Fox in 2019. These acquisitions illustrate Disney’s deliberate strategy to continuously acquire companies with strong brands, valuable intellectual property, and extensive audiences, thereby cementing its position as a global media and entertainment powerhouse.