merger

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Related to Mergers: Mergers and acquisitions, Horizontal Mergers, Types of Mergers

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 2003 regulations expanded the applicability of the statutory merger or consolidation provisions, by expressly permitting a merger of a target into a limited liability company (LLC) that is disregarded as a separate entity from the acquiring corporation for Federal income tax purposes.
Because of the importance of local banking markets, I would like to provide somewhat more detail on he implications of bank mergers for local market concentration.
Responses in 1991 received from 60 of the 74 mergers that occurred between 1983 and 1988 indicated that 58 percent of the hospitals acquired (i.
61) Although the primary purpose of the merger was to give Inductotherm the benefit of Thermatool 1's NOLs, the transaction was not subject to section 269 of the Internal Revenue Code because section 269(a)(2), which is the provision that applies to mergers, does not apply when the corporations have a common owner.
In addition, because such merger constitutes a specified form of change in control, the exchange rate applicable to exchanges of the Exchangeable Notes occurring up to and including the 30th business day following the effective date of the merger will be adjusted.
A statutory merger is a tax-free, type A reorganization, representing a combination of two corporations in which the continuity-of-interest requirement is met by a sufficient amount of consideration received being the surviving corporation's stock.
Rod Jacobs, who retired from the CFO post in January after helping pilot Wells Fargo through a widely praised merger with Norwest, says, "I don't think there are any easy mergers.
Mergers resulting in unconcentrated markets are not likely to have adverse competitive effects and ordinarily require no further analysis or a court challenge.
There is no simple answer, and indeed, there are rafts of shoals that mergers can founder on: poor pricing, cultural and/or people issues, poor planning, bad timing, weak integration.
That's not to say that large-scale mergers are always unimaginative.
Economists generally agree that the first merger wave occurred at the turn of the century, followed by others in the 1920s, the 1960s and the 1980s.
Don't go into a merger or acquisition unless it's part of a clear, well-thought-out, written strategic plan, warns Nicholas J.