An acquisition of a stake is a transaction in which a natural or legal person, often an investor or a company, acquires a portion of a company’s capital. This acquisition confers property rights and, depending on the proportion held, influence over the company’s management or strategic decisions.
It can take several forms:
- Minority investment: an equity interest representing less than 50% of the capital, generally giving the investor a voice but not total control, with or without a blocking minority.
- Majority investment: acquisition of more than 50% of the capital, giving the investor control of the company and influence over its strategic decisions.
Equity investments are often used to:
- Finance the development of a company or support a specific project.
- Create strategic partnerships or strengthen commercial alliances.
- Increase the value of an investment portfolio for investors or private equity funds.
Equity investment is a financing and investment mechanism that allows the acquisition of an economic interest in a company, and sometimes decision-making power.