Definition of Merger
The definition of merger inwards full general in addition to inwards blogspot.com//search?q=what-is-production-definition-meaning">finance tin hand the sack live stated every bit follows:
In General,
"Merger is an absorption of 1 or to a greater extent than companies past times a unmarried existing company."
In Finance,
"Merger is an act or procedure of purchasing equity shares (ownership shares) of 1 or to a greater extent than companies past times a unmarried existing company."
Image credits © Arrow International.
Meaning of Merger
Before nosotros understand, What is Merger? First, let's abide by out the uncomplicated important of an acquiring fellowship in addition to acquired companies.
- Acquiring company is a unmarried existing fellowship that purchases the bulk of equity shares of 1 or to a greater extent than companies.
- Acquired companies are those companies that give upwards the bulk of their equity shares to an acquiring company.
Merger is a technique of blogspot.com//search?q=what-is-production-definition-meaning">business growth. It is non treated every bit a concern combination.
Merger is done on a permanent basis. Generally, it is done betwixt 2 companies. However, it tin hand the sack too live done alongside to a greater extent than than 2 companies.
During merger, an acquiring fellowship in addition to acquired companies come upwards together to create upwards one's hear in addition to execute a merger understanding betwixt them.
After merger, acquiring fellowship survives whereas acquired companies produce non endure anymore, in addition to they cease (stop) to exist.
Merger does non upshot inwards the formation of a novel company. The blogspot.com//search?q=what-is-production-definition-meaning">management of acquiring fellowship continues to atomic number 82 (direct) the merger.
Example of Merger
Consider the instance of merger shown inwards the next diagram.
blogspot.com//search?q=what-is-production-definition-meaning">shareholders of the Company 'B' volition live given the shares of Company 'A'. The acquiring Company 'A' volition perish on to operate (function) past times its one-time (former) name.
Some recent examples of well-known mergers are every bit follows:
- British Salt operating inwards United Kingdom of Great Britain in addition to Northern Ireland of Britain in addition to Northern Republic of Ireland merged with TATA Chemicals based inwards India.
- Zain Telecommunications operating inwards Africa merged with Bharti Airtel Limited based inwards India.
- blogspot.com//search?q=what-is-production-definition-meaning">Bank of Rajasthan operating inwards Republic of Republic of India merged with ICICI Bank (India).
SUBSCRIBE to Our Newsletter
Sign up here with your email address to receive updates from this blog in your inbox.