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
i. To disengage government from economic or business activities in which it has no competence or in areas where the private sector is more competent. ii. To make the enterprises a

Find the current value of the following ordinary annuities. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to se

On December 31, 2010, the stockholders' equity section of Arndt, Inc., was as follows: Common stock, par value $10; authorized 30,000 shares; issued and outstanding 9,000 shares $

GHH, Inc. has two classes of stock authorized: $100,000 par preferred and $1.00 par value common. As the begining of 20C, 200 shares of preffered stock and 300,000 shares of common

As a borrower, which of the following two 30 year, monthly payment loans would you choose (and why) if you had a 10 year expected payment horizon: 5% interest rate with 3.5 points,

The following information is available for Mehring Corporation for the year ended December 31, 2012: Collection of principal on long-term loan to a supplier

Equitable apportionments There are five leading cases where the courts have laid down rules to meet specific situations in which there is a conflict of interest between life tena

how solve the problems of trail balance?

Q. What do you mean by Operating Agreement? Operating Agreement - Agreement, generally a written document which sets out the rules by which a LIMITED LIABILITY COMPANY (LLC) is

The common stock of the CC Corporation has been trading in a narrow price range of around $50 for months, and you are convinced it is going to stay in that range for the next 3 mon