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GCSE Business · key term
When one business buys a controlling interest in another business and gains control of it.
Used by AQA, Edexcel and OCR
Paper 1, Paper 2
The purchase of one business by another, giving the buyer control of the acquired business.
Revise: Methods of Business ExpansionExternal growth combines it with another business through a merger or takeover. A business can use both routes at different times.
Specification 2.1.1 · Paper 2
The purchase of a controlling interest in another business. Buying more than half of a company’s voting shares normally gives control.
Revise: Internal and External Business GrowthExternal, or inorganic, growth means expanding through a merger or takeover involving another business. The distinction is how expansion happens, not whether the business uses its own money or borrows to pay for it.
Paper 1
Revise: External GrowthA business does not have to build every new shop, factory or customer relationship itself. It can expand by combining with another business that already has these resources. This is external growth, achieved through mergers or takeovers.
Distinguish a merger, where businesses agree to combine, from a takeover, where one business gains control of another.
Distinguish how businesses join (merger or takeover) from their relationship (horizontal, vertical or diversification). A takeover can be any of these types.
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