Business / Taxes / Merger: When two or more companies consolidate by exchanging common stock, and the resulting single company replaces the old companies, the consolidation is described as a merger. The shareholders of the old companies receive prorated shares in the new company. A merger is typically a tax-free transaction, meaning that shareholders owe no capital gains or lost taxes on the stock that is being exchanged. A merger is different from an acquisition, in which one company purchases, or takes over, the assets of another. The acquiring company continues to function and the acquired company ceases to exist. Shareholders of the acquired company receive shares in the new company in exchange for their old shares. Despite their differences, mergers and acquisitions are invariably linked, often simply described as M&As.

Other Words for Merger

Merger Adverb Synonyms: combination, coalescence, union, merging, amalgamation, consolidation, coalition, pooling, blending, mixing, mingling, commingling, fusing, fusion

Reverse Merger

Business / Taxes / Reverse Merger: In a reverse merger, a privately held company purchases a publicly held company and, as part of the new entity, becomes public without an initial public offering (IPO). It’s described as reverse bec MORE

Antimerger Clause

Business / Real Estate / Antimerger Clause: A clause in a mortgage or deed of trust specifying that the senior lienholder will retain lien priority in the event of a merger. MORE

Horizontal Merger

Business / Finance / Horizontal Merger: The process of dividing each expense item of a given year by the same expense item in the base year. It allows assement of changes in the relative importance of expense items over time and the behavio MORE