A:

Corporate mergers and acquisitions can vary considerably in the time they take to be completed. There are a number of individual steps that need to be successfully completed by two public companies before they are legally combined into a single entity in what is called a merger of equals.

The entire process officially starts with an offer made by one company to another, but both companies will likely be involved in closed door discussions about the proposed merger before any official announcement of a merger proposal are made. Once the merger is officially proposed, the financial details are specified and then distributed to the shareholders of both companies. At this point, the shareholders must vote to approve the merger. Assuming the required votes are obtained from both sides, the merger is typically reviewed by government authorities to determine whether it conforms to antitrust laws. The length of time this process takes can vary considerably from one merger to another depending on the size and complexity of the companies involved and the industries in which they happen to operate.

Because the time between the announcement of a merger and its completion can vary, the companies involved usually announce an expected time frame for completion. Once the merger proposal passes all the necessary hurdles, a precise date of combination is announced which, when reached, legally merges the two companies.

To learn more, check out The Basics of Mergers and Acquisitions.

RELATED FAQS
  1. What is the difference between a merger and an acquisition?

    Read about the legal and practical differences between a corporate merger and corporate acquisition, two terms often used ... Read Answer >>
  2. What is the difference between a merger and a takeover?

    In a general sense, mergers and takeovers (or acquisitions) are very similar corporate actions - they combine two previously ... Read Answer >>
  3. What's the difference between a merger and an acquisition?

    Learn about the difference between mergers and acquisitions. Discover what factors may encourage a company to merge or acquire ... Read Answer >>
  4. How can I develop a profitable merger arbitrage strategy?

    Learn how to utilize a simple merger arbitrage trading strategy to profit from the typical temporary price discrepancies ... Read Answer >>
  5. What can a business do to prevent a merger?

    Learn how to prevent business mergers, including hostile takeovers, that are not in consumers' best interests through the ... Read Answer >>
  6. In M&A how does an all-stock or all-cash deal affect the equity of the buying company? ...

    Mergers and acquisitions (M&A) are forms of corporate restructuring that are becoming increasingly popular in the modern ... Read Answer >>
Related Articles
  1. Investing

    The Merger: What To Do When Companies Converge

    Mergers occur when it’s beneficial for two companies to combine business operations. The question is; if you’re invested in a company that’s involved in a merger, will it benefit you?
  2. Small Business

    What Merger And Acquisition Firms Do

    The merger or acquisition process can be intimidating. This is why merger and acquisition firms step in to facilitate the process.
  3. Investing

    Do Mergers Save Or Cost Consumers Money?

    A merger or acquisition can actually be beneficial to the customer - find out how, in this article.
  4. Investing

    A Guide To Spotting A Reverse Merger

    This corporate action can be profitable for investors who know what to look for.
  5. Investing

    What Investors Can Learn From M&A Payment Methods

    How a company pays in a merger or acquisition can reveal a lot about the buyer and seller. We tell you what to look for.
  6. Taxes

    Retail Investors May Face Capital Gains Tax on Pfizer Allergan Merger

    The Pfizer-Allergan merger may end up costing retail investors a pretty penny, but they may be able to minimize their losses.
  7. Small Business

    What's a Merger?

    Mergers are not the same as acquisitions. In an acquisition, one company buys and subsumes another company, leaving only the buyer in place. In most mergers, both companies merge to form an entirely ...
  8. Investing

    Reverse Mergers: The Pros And Cons

    Reverse mergers can provide excellent opportunities for companies and investors, but there are still some downsides and risks.
RELATED TERMS
  1. Merger Of Equals

    The combination of two firms of about the same size to form a ...
  2. Merger Mania

    A period of time with significant merger and acquisition activity ...
  3. Mergers and Acquisitions - M&A

    A merger is a combination of two companies to form a new company, ...
  4. Horizontal Merger

    A merger occurring between companies in the same industry. Horizontal ...
  5. SEC Form 425

    The prospectus form that companies must file to disclose information ...
  6. Circular Merger

    A transaction to combine companies that operate within the same ...
Hot Definitions
  1. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  2. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  3. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  4. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  5. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  6. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
Trading Center