What is a Merger? [corporate mergers & acquisitions]

Описание: A merger, as it pertains to corporate business transactions, involves the combination or integration of two or more corporations into a single corporate entity operating under a singular corporate name. Each of the merging corporations cancels their existing capital stock and their respective shareholders are issued new shares in the newly merged corporation based upon a previously agreed formula reflecting the effective contribution to the merged entity provided by the former corporation. As such, the merged entity takes on the assets, personnel, debt and business opportunities of each of the former corporations, yet streamlines leadership into a singular leadership team while tending to effectuate further synergies to attain part of the intended profit optimization that arises from eliminating duplicative functions and personnel, as well as realizing further commercial efficiencies by drawing upon the best components of the former corporations and applying them throughout the merged corporation.
From the perspective of forms of corporate merger, they can be classified into four categories:
1. Horizontal Mergers, being a merger between corporations engaged with similar products;
2. Vertical Mergers, being a merger of corporations that consolidates the supply chain of a particular product line;
3. Concentric Mergers, being a merger between corporations who have similar target customers or clients with different products; and
4. Conglomerate Mergers, being a merger between corporations who offer diverse array of products and/or services.
#corporate #merger