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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.

The Columbia Electronic Encyclopedia™ Copyright © 2013, Columbia University Press. Licensed from Columbia University Press. All rights reserved. www.cc.columbia.edu/cu/cup/

merger

The final gravitationally bound product of closely interacting galaxies or other interacting systems. Some IRAS galaxies are believed to be recent merger products.
Collins Dictionary of Astronomy © Market House Books Ltd, 2006
The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

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).

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.

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
Collins Discovery Encyclopedia, 1st edition © HarperCollins Publishers 2005
References in periodicals archive ?
(d) Legal form of the business combination Acquisition by a
The company will effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganisation or similar business combination with one or more businesses or assets.
The new SFAS 141R also moves toward a more principles-based standard by requiring in paragraph 73 that the disclosures should include, "whatever additional information is necessary" to let the users fully evaluate the financial effect and nature of the business combination. These new increased disclosure requirements should result in statements that are more transparent and useful to the users.
The Chairman of BMI Bank, Sheikh Khalid bin Mustahail Al Mashani also thanked the Central Bank of Bahrain and shareholders of BMI Bank for their approval to proceed with the business combination.
Likewise, the Business Combination is expected to not have a material impact on Nidec's consolidated results of operations.
The EDs now require that these transaction costs to be accounted for separately from the business combination, as they do not represent assets acquired and liabilities assumed.
These proposed amendments to IAS 37 complement the Exposure Draft of Proposed Amendments to IFRS 3 Business Combinations, and would result in items previously described as 'contingent liabilities' being treated more consistently in and outside a business combination.
2) An acquirer must be identified for every business combination within its scope.
European Metal Recycling Ltd., Warrington, U.K., has sent a letter to Metal Management Inc.'s board proposing a legal and financial due diligence study of Metal Management to pursue a business combination.
A business combination occurs when an entity acquires net assets that constitute a business or equity interests of one or more other entities and obtains control over that entity or entities.
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. This way of proceeding is well-entrenched at the Commission and precedes Monti's time as competition regulator.

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