Nowadays, mergers and acquisitions are stated as favorable strategies and as free flows of capital applied by managers for the optimal implementation of resources and assets. Acquisition is associated with a condition where two businesses are placed under one shelter and are run like members of a group or are merged as a single corporate. In mergers, two businesses are combined in a new form based on the mutual interests of both parties. The shares of the two businesses are usually exchanged so that they could take part in the new business as shareholders. In acquisition, a business begins to control another business effectively by purchasing parts of its ownership. The present study explored the impact of acquisition on performance of Iranian target companies listed in Tehran Stock Exchange. The results of testing research hypotheses showed that performance of target companies did not significantly increase after acquisition, suggesting a decreasing trend in the performance of the target companies after acquisition compared with the period before acquisition.