Mergers and Acquisitions (M&A) are sometimes treated as synonymous. However, there are significant differences between these two types of integration. Acquisition is an operation in which the buyer company acquires part or all of the shares of the target company in order to take control of it. On the other hand, the Merger is a transaction in which two or more companies are combined and start to represent the same legal entity. In this case, the shares of these companies are replaced by the ones of the new entity.

There are different types of M&A. The classification that considers the economic activities carried out by the companies is the most usual in the market, in which an operation of M&A can be:

Horizontal: it occurs between companies that compete in the same market segment. In general, this kind of M&A is made in order to obtain gains in productivity, economy of scale, market share increase etc;

Vertical: it occurs between companies that belong to different niches of the same productive chain. The organizations involved usually have asupplier-customer relationship and vice versa;

Conglomerate: it occurs among companies of distinct industrial sectors;

Congeneric: it occurs among companies of the same sector, but with distinct lines of business. In other words, they do not have a supplierclient relationship nor are they competitors, however they have some kind of synergy.