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1. Meaning of
Merger
• A merger refers to a combination of
two or more companies, usually of not
greatly disparate size, into one
company.
• A merger involves the mutual decision
of two companies to combine and
become one entity; it can be seen as a
decision made by two "equals".
• Merger refers to a situation when two
or more existing firms combine
together and
form a new entity.
• Merger is a marriage between two
companies of roughly same size. It is
thus a combination of two or more
companies in which one company
survives on its own name and the
other ceases to exist as a legal entity.

2. Types of
Merger
HORIZONTAL MERGER-
• Horizontal mergers take place where the two
merging companies both produce similar
product in the same industry.
• For example A potential merger between Pepsi
and Coca-Cola would be one of the mergers
where both companies compete in the same
industry, and the combination would create a
new larger company with the higher market
share.
VERTICAL MERGER-
• Vertical mergers occur when two firms, each
working at different stages in the production
of the same good, combine. For example
Pepsi’s merger with restaurants chains that it
supplies with beverages is a vertical merger.
CONGLOMERATE MERGER-
It is the combination or merger of two
companies that are involved in totally unrelated
industries, business activities, or geographic
areas is refereed to as a Conglomerate merger.
For Example:- Honey well is a well known
industrial name. It supplies different ranging
products like home range, thermostats, security
alarms. This conglomerate company also sells
large scale water processing units etc.

3. Meaning of Amalgamation
Amalgamation signifies the transfers of all
are some part of assets and liabilities of one
or more than one existing company or two
or more companies to a new company.
According to Halsbury’s law of England
amalgamation is the blending of two or more
existing companies into one undertaking, the
shareholder of each blending companies
becoming substantially the shareholders of
company which will carry on blended
undertaking. There may be amalgamation by
transfer of one or more undertaking to a
new company or transfer of one or more
undertaking to an existing company.

4. Example of
Amalgamation
• Maruti motors operating in India And
Suzuki based in japan amalgamated in
India and Suzuki based in japan
amalgamated to form a new company
called Maruti Suzuki(India) limited.

5. Meaning of Acquisition
• An acquisition is a situation whereby one company purchases
most or all of another company's shares in order to take control.
• An acquisition occurs when a buying company obtains more
than 50% ownership in a target company.
• As part of the exchange, the acquiring company often purchases
the target company's stock and other assets, which allows the
acquiring company to make decisions regarding the newly
acquired assets without the approval of the target company’s
shareholders.

6. EXAMPLE OF ACQUISITION
• Let's assume Company XYZ wants to acquire Company ABC. Company
XYZ starts to buy ABC shares on the open market, but once Company
XYZ acquires 5% of ABC, it must formally (and publicly) declare to
the Securities and Exchange Commission (SEC) how many shares it owns.
Company XYZ must also state whether it intends to buy ABC or just hold
its existing shares as an investment.
• If Company XYZ wants to proceed with the acquisition, it will make a
"tender offer" to ABC's board of directors, followed by an announcement to
the press. The tender offer will indicate, among other things, how much
Company XYZ is willing to pay for ABC and how long ABC shareholders
have to accept the offer.
• Once the tender offer is made, ABC can accept (1) the terms of the offer,
(2) negotiate a different price, (3) use a "poison pill" or other defense to
avert the deal, or (4) find another company, who hopefully will pay as
much or more as XYZ is offering, to buy them.
• If ABC accepts the offer, regulatory bodies then review the transaction to
ensure the combination does not create a monopoly or other anti-
competitive circumstances within the industries involved. If the regulatory
bodies approve the transaction, the parties exchange funds and the deal is
closed.
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