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| Home > Business Law > Merger and Amalgamation |
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| Merger and Amalgamation |
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Merger is a combination of two or more companies into a single company where one survives and the others lose their corporate existence. The survivor acquires the assets as well as liabilities of the merged company or companies. All assets, liabilities and stock of one company stand transferred to transferee company in consideration of payment in the form of equity shares of transferee company or debentures or cash or a mix of the two or three modes.
Ordinarily amalgamation means merger. Halsbury's Laws of England describe amalgamation as a blending two or more existing undertakings into one undertaking. The shareholders of each blending of each blending company becoming substantially the shareholders in the company which is to carry on the blended undertaking.
The blending of undertakings may take any of the following forms:
- One or more undertaking blending with another undertaking. This is more commonly known as absorption since in the process of blending an undertaking is getting absorbed into another undertaking.
- Two or more undertakings blending to form a new undertaking. This is more commonly known as merger, since the blending companies merge their respective separate identities to form a new undertaking.
Therefore the essence of amalgamation is to make an arrangement whereby uniting the undertakings of two or more companies so that they become vested in, or under the control of, one company which may or may not be the original of the two or more of such uniting companies. |
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