Transactions regarding Merger (of Companies)
What is merger?
The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.
In other words; voluntary amalgamation of two firms on roughly equal terms into one new legal entity. Mergers are effected by exchange of the pre-merger stock (shares) for the stock of the new firm. Owners of each pre-merger firm continue as owners, and the resources of the merging entities are pooled for the benefit of the new entity. If the merged entities were competitors, the merger is called horizontal integration, if they were supplier or customer of one another, it is called vertical integration.
Restructuring of Commercial Companies Merger;
> To merge different types of companies;
> If the transferee is an equity company, it can merge with collective and commandite companies,
> If the transferred is a partnership, it can merge with equity companies and cooperatives,
> If the transferee is a cooperative, it can merge with partnerships.
> For example, a joint stock company may merge with a limited (liability) company.
However, a joint stock company can be merged with a collective company if it is the transferee.
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