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 ?
Example 1: Pursuant to Country Q's merger statutes, Corporation Z and Corporation Y, each incorporated under the laws of Q, combine in a transaction in which all of Z's assets become assets of Y, and, in the transaction, Z ceases its separate legal existence.
Lefteroff says he once witnessed a case in which a company involved in a reverse merger "didn't do its homework, and they got bit by unrecorded liabilities.
Because the merger of FNIS and FNF will require the exchange of outstanding stock options between entities under common control, the combined companies will be required to record a compensation expense equal to the difference between the aggregate exercise prices and intrinsic value of vested FNIS stock options on the date the merger closes.
A merger allows the shareholders of smaller entities to own a smaller piece of a larger pie, increasing their overall net worth.
Mergers among insurance companies are more likely to succeed if their chief executive officers implement four overarching goals.
The merger will help create the second largest wireless company in the country and analysts are already calling it a "match made in heaven.
Increased competitive pressures caused by rapid technological change and the resulting blurting of distinctions between banks and other types of financial firms, lower barriers to entry due to deregulation, and increased globalization also contribute to merger activity.
Although there could be understandable disagreement of whether the example of hospital systems acquiring physician practices or HMOs fits the definition of conglomerate control, the more institutionally-oriented type leadership, when responsible for implementing a complex merger, has shown evidence of experiencing more difficulty in managing physician practices and HMOs than managing a newly acquired hospital (19) In addition, as the physician and hospital leadership argue in the media about who is ultimately responsible to control the region's delivery of health services, a divestiture of the more clinical-medical aspects of some health networks can he expected to occur with increasing frequency.
United States allowed the surviving corporation in a merger to carry back NOLs to offset the pre-merger income of the merged corporation.
These factors include, but are not limited to, (i) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (ii) the outcome of any legal proceedings that may be instituted against Columbia and others following announcement of the merger agreement; (iii) the inability to complete the merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions to completion of the merger; (iv) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger; (v) the ability to recognize the benefits of the merger; and (vi) the amount of the costs, fees, expenses and charges related to the merger.
In the example above, the transaction could not have qualified as a C reorganization or a forward triangular merger (by reason of Sec.
Experts say that pricing is a critical component of a good merger.