Distinctions between a business combination and a merger, Financial Accounting

What are the legal distinctions between a business combination, a merger, and a consolidation?

Mergers Vs Acquisitions:

When one company takes over another and clearly establishes itself as the new owner, the purchase is called as acquisition or consolidation. From the legal point of view, the target company ceases, the buyer "swallows" the entity and the buyer's stock continues to be traded whereas a merger happens when two firms agree to go forward as a single company rather than remain separately owned and operated. The firms in merger are often of equal size but it's not necessary. New company's stock is issued in its place by surrendering both companies' stocks.

We can say that a deal will be called a merger when both CEOs agree that joining is in the best interest of both of their companies but when the deal is unfriendly (target company does not want to be purchased) it is always  regarded as an acquisition.

 

 

Posted Date: 3/12/2013 2:48:27 AM | Location : United States







Related Discussions:- Distinctions between a business combination and a merger, Assignment Help, Ask Question on Distinctions between a business combination and a merger, Get Answer, Expert's Help, Distinctions between a business combination and a merger Discussions

Write discussion on Distinctions between a business combination and a merger
Your posts are moderated
Related Questions
Illustration of Head office records In order to provide a check that branch managers and staff deal properly with goods and cash passing through their hands, goods are normally

Requirements: Part I Access the IFRS and the Generally Accepted Accounting Principles (GAAP) of your country. a. Note ten differences between the two sets of GAAP. Part II Ac

SYSTEM ONE-THE HEAD OFFICE MAINTAINS ALL THE ACCOUNTS This system is suitable for an enterprise that has small branches (possibly in another area of the town or city where the

im doing compound interest my calculator doest have anxy butyx cant do nothing with the ten being the power of .9

ACCUMULATION ACCOUNTS FOR MINORS   (a) Income accumulations : When property is left in trust for minors, the income earned for the period will be divided equally or according t

STATEMENTS OF FINANCIAL POSITION: as at 31 December 2011 Group                                 Note         2011                         2010        RM'

What Accounting method (cash or accrual) would you recommend for the following businesses? a. A gift shop with average annual gross receipts of $900,000 b. an accounting partnershi

CONSOLIDATED BALANCE SHEET The consolidated balance sheet involves adding assets and liabilities of the subsidiary to those of the holding company while excluding inter-company

Day Corporation purchased a patent on January 1, 2012 for $360,000. The patent had a useful life of 10 years at that date. In January of 2013, Day successfully defends the patent a