merger

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merger,

in corporate business, fusion of two or more corporations by the transfer of all property to a single corporation. The remaining corporation continues in existence, having absorbed the other(s). Mergers may be of various types: A vertical merger integrates different types of businesses that may share a supplier-customer relationship; a horizontal merger brings together related businesses; an extensional merger. joins two similar businesses to enter a new market; and a hostile takeover occurs when a stronger business absorbs another against its will. The methods of effecting mergers vary. Often the corporation that continues to function makes an outright purchase of the property and stock of the others; exchange of bonds, options, and other agreements are also employed by the corporations involved.

Mergers may be effected to increase profits and reduce losses through the reduction of competition, to diversify production, to protect against the liabilities of concentration in a single area, or to revive or rejuvenate failing businesses by the infusion of new management and personnel. Mergers for monopolistic purposes were among the unfair practices that the Sherman Antitrust ActSherman Antitrust Act,
1890, first measure passed by the U.S. Congress to prohibit trusts; it was named for Senator John Sherman. Prior to its enactment, various states had passed similar laws, but they were limited to intrastate businesses.
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 (1890) and, more especially, the Clayton Antitrust ActClayton Antitrust Act,
1914, passed by the U.S. Congress as an amendment to clarify and supplement the Sherman Antitrust Act of 1890. It was drafted by Henry De Lamar Clayton.
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 (1914) attempted to correct. The international nature of many modern corporations now also subjects mergers to antitrust scrutiny overseas, particularly in the European Union.

The end of the 20th cent. witnessed a great increase in mergers; in the United States alone, 60,375 mergers involving a total of over $4.5 trillion occurred between 1980 and 1996. Among the largest recent U.S. mergers are those between America Online and Time Warner (2000; $165 billion, but worth significantly less after the bubble in Internet-related stocks collapsed), Exxon and Mobil (1999; $81 billion); Citicorp and Travelers Corp. (1998; $72.6 billion), AT&T and Bell South (2006; $67 billion), SBC Communications and Ameritech (1998; $60.1 billion), and AT&T and TCI (1999; $48 billion).

See also conglomerateconglomerate,
corporation whose asset growth, often very rapid, comes largely through the acquisition of, or merger with, other firms whose products are largely unrelated to each other or to that of the parent company.
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.

merger

The final gravitationally bound product of closely interacting galaxies or other interacting systems. Some IRAS galaxies are believed to be recent merger products.

Merger

 

the combining of two or more joint-stock companies, a form of centralization of capital under imperialism. The production of the merging companies may be identical or similar innature (see alsoAMALGAMATION IN ECONOMICS).

merger

1. Commerce the combination of two or more companies, either by the creation of a new organization or by absorption by one of the others
2. Law the extinguishment of an estate, interest, contract, right, offence, etc., by its absorption into a greater one
References in periodicals archive ?
The Exposure Draft rejects the concept of discounting deferred tax assets and liabilities in connection with business combinations.
All business combinations would be accounted for under the purchase method only.
gt;Examples of Business Combinations One of the interesting examples in the implementation guidance concerns business combinations when the fair value of the consideration transferred for the equity interests in the acquiree is less than the fair value of that interest, resulting in a gain from the bargain purchase.
In a business combination effected solely through the distribution of cash or other assets or by incurring liabilities, the entity that makes such distributions is generally the acquiring entity.
By analyzing the economic characteristics of a market--demand elasticity, barriers to entry, number of participants and so on--Monti and his Merger Task Force attempt to determine in advance the competitive effects of a business combination.
96, Treasury Stock Acquisitions Following Consummation of a Business Combination Accounted for as a Pooling of Interests.
Merrill Lynch concluded that FASB's push for harmonization comes at an inopportune time--when there is no international consensus on accounting principles involving all aspects of business combinations.
The proposed statement would eliminate use of the pooling-of-interests method to account for business combinations and require the purchase method to be used to account for all business combinations.
97 in which the SEC's staff explains how generally accepted accounting principles are correctly applied to business combinations before or during initial public offerings (IPOs).
OTCBB:MPAQ,MPAQB,MPAQW,MPAQZ) announced today that it has signed two letters of intent relating to business combinations in the telecommunications industry.

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