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 ?
A blank check company, ELEC was formed to acquire, engage in a share exchange, share reconstruct and amalgamate, purchase all or substantially all of the assets of, enter into contractual arrangements, or engage in any other similar business combination with one or more businesses or entities.
Andina is a Cayman Islands exempted company formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization, or similar business combination with one or more businesses or entities.
ROI is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving ROI and one or more businesses.
The implementation guidance provides examples of how to account for different business combinations and explanations of topics, such as definition of a business; measuring the fair value of the acquiree; intangible assets; illustration of disclosure requirements; and reverse acquisitions.
The cost of an entity acquired in a business combination includes the direct costs of the business combination, which include "out-of-pocket" or incremental costs directly related to a business combination (such as a finder's fee and fees paid to outside consultants for accounting, legal or engineering investigations or for appraisals).
This leads to some curious Catch-22s, as in France, where takeover laws designed to streamline business combinations forbid firms to make a bid conditional on regulatory approval, while EU law forbids the combination to go ahead without it.
We may be stepping from relatively clear waters into muddy ones, but regardless of accounting rules on business combinations, a good deal will still be a good deal.
were concerned that the opportunity to reduce income tax expense in future years for a portion of acquired tax benefits might sometimes influence purchase price allocations for business combinations.
Nicolas Berggruen, Liberty's co-founder said, "The changes we have made to the business combination agreement have required contributions by all parties.
Subject to the terms and conditions set forth in the Business Combination Agreement, the Business Combination will be effected through (1) the Tokyo Electron Merger of Tokyo Electron and the Tokyo Electron Merger Sub that will be incorporated by Tokyo Electron, and (2) the merger of Applied Materials and a company that will be incorporated by Applied Materials under the laws of the state of Delaware (the Applied Materials Merger ).
Concluding months of redeliberations on all the substantive issues raised by constituents in connection with its 1999 proposal on Business Combinations and Intangible Assets, the Financial Accounting Standards Board unanimously supported the issuance of final statements on business combinations and on goodwill and intangible assets.
There is no goodwill recorded at the time of the business combination.

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