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Related to merger: Vertical Merger, Horizontal merger, Merger and acquisition


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



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).


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 ?
Suppose the merger of one foreign corporation with and into another foreign corporation was preceded by a sale by the acquired corporation of one of its two, equally sized, historical businesses.
In Example 1 above, this transaction could not have qualified as a C reorganization, or for that matter as a forward triangular merger (by reason of Sec.
A merger allows the acquirer to avoid many of the costly and time-consuming aspects of asset purchases, such as the assignment of leases and bulk-sales notifications.
Of considerable importance when there are minority stockholders is the fact that upon obtaining the required number of votes in support of the merger, the transaction becomes effective and dissenting shareholders are obliged to go along.
Based on our research and experiences with clients, winning mergers are based on four overarching principles, all of them driven by the chief executive officer.
A dispute over inventory, in fact, was in early February clouding the merger between Tyson Foods and meat-packing firm IBP.
Global consolidation and competitiveness undoubtedly prodded Rolf Breuer, the self-confident chief of Deutsche Bank, to announce his plans for a $30 billion merger with Frankfurt rival DresdnerBank.
And in some cases, to obtain merger approval, applicants have divested banking assets and deposits in certain local markets where the merger would have otherwise resulted in excessive concentration.
Any efficiencies due to a merger must be weighed against any increase in market power.
The court cited Metropolitan Edison for its discussion of the nature of a statutory merger, saying "that the transferee in a statutory merger should be deemed to be continuing in itself the corporate life of the now-defunct component, and that it followed from this conceptual identity that the two corporate entities were to be treated for a substantive purpose in the income tax as the same taxpayer.
368-2(b)(1) (iii), Example (8), a merger of one domestic corporation with and into another, pursuant to the necessary state law, is an A reorganization, even though the merger was preceded by the acquired corporation's sale of one of its two, equally sized, historical businesses.
Half a continent and orders of magnitude away, tiny GoldMine Software Corporation had just completed a merger of equals when John Hillyard joined as CFO in November.