3. Mergers & Amalgamation
Merger
Merger is the combination of two or more companies
which can be merged together either by way of
amalgamation or absorption. The combining of two
or more companies, is generally by offering the
stockholders of one company securities in the
acquiring company in exchange for the surrender of
their stock.
4. Mergers & Amalgamation
Acquisition
Acquisition is general sense is acquiring the ownership
in the property. In the context of business
combinations an acquisition is the purchase by one
company of a controlling interest in the share capital
of another existing company.
5. Mergers & Amalgamation
Takeover
Takeover implies acquisition of control of a
company which is already registered through the
purchase or exchange of shares. Takeover takes
place usually by acquisition or purchase from the
shareholders of a company their shares at a
specified price to the extent of at least controlling
interest in order to gain control of the company.
6. Mergers & Amalgamation
Amalgamation
An amalgamation is a combination of two or more companies into a new
entity. Amalgamation is distinct from a merger because neither
company involved survives as a legal entity. Instead, a completely new
entity is formed to house the combined assets and liabilities of both
companies.
The term amalgamation has generally fallen out of popular use in
countries like the United States, being replaced with the terms merger
or consolidation. But it is still commonly used in countries like India.
Types of Amalgamation
One type of amalgamation
similar to a merger
pools both companies’ assets and liabilities, and the shareholders’ interests
together.
All assets of the transferor company become that of the transferee
company.
12. Mergers & Amalgamation
Demerger
A demerger can take place through a spin-off by
distributed or transferring the shares in a subsidiary
holding the business to company shareholders
carrying out the demerger. The demerger can also
occur by transferring the relevant business to a new
company or business to which then that company's
shareholders are issued shares
