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 ?
Speaking about the proposed merger between BankDhofar and NBO, H E Salmi said, 'We hope to see something happening within six months.
The introduction of commitment decisions in competition practice is an attempt at a win-win solution wherein the merger parties can proceed with the transaction but at the same time address the potential harm/s to the market through the parties' own undertakings.
The court directed the respondents to file a report regarding the proceeding of the merger of the banks and put off the matter to May 5.
What can explain the positive effect of the legislative changes on the stock market's valuation of a banking firm acquired in a merger? Two general explanations can be put forward.
Analysis of Pre and Post Merger and Acquisition Financial Performance of Banks in Pakistan.
The fifth and the last wave of merger took place during 1992 to 2000 which was motivated by the globalization of the boom in stock market.
In the present paper merger of Bank of Rajasthan with the ICICI Bank and the merger of State Bank of Indore with the State Bank of India has been selected in order to evaluate the impact of M and As.
As regards the individual labor contracts that shall be transferred they must be in force at the time of the merger, being transferred also the ones that are suspended.
Mergers can have many effects, and they may vary across industries and markets.
(3) Considerations of monopsony have played a role in merger analysis in recent years, but considerations of possibly compensating efficiencies have not.
According to him, only 29 per cent of companies achieve an increase in profitability after a merger or acquisition, while 57 per cent underperform and in 14 per cent there is no change at all after a merger.
According to A T Kearney choosing the right partner is crucial, because no matter how well a merger is executed, if the partner is wrong the transaction will never result in a stronger company.