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. Why are the terms 'merger' and 'acquisition' always used together if they describe ...

    Learn about mergers and acquisitions and how these two corporate actions differ based on the size and participation of the ... Read Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. How does a merger affect the shareholders?

    Explore the effect of a merger and understand how the process affects shareholders of the newly merged firm in terms of stock ... Read Answer >>
Related Articles
  1. Investing

    The Merger - What To Do When Companies Converge

    Learn how to invest in companies before, during and after they join together.
  2. 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?
  3. Investing

    A Guide To Spotting A Reverse Merger

    This corporate action can be profitable for investors who know what to look for.
  4. 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.
  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. 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.
  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. Small Business

    What's a Horizontal Merger?

    A horizontal merger occurs when companies within the same industry merge.
  9. Financial Advisor

    Office Depot and Staples Merger: What You Need to Know (SPLS, ODP)

    A major office-supply company merger is now in the works between Office Depot and Staples. First attempted 18 years ago, will this time be the charm?
  10. Investing

    What's a Vertical Merger?

    A vertical merger occurs when two companies that produce goods or services for the same finished product merge operations.
RELATED TERMS
  1. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies ...
  2. Merger Of Equals

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

    A period of time with significant merger and acquisition activity ...
  4. Horizontal Merger

    A merger occurring between companies in the same industry. Horizontal ...
  5. Merger

    The combining of two or more companies, generally by offering ...
  6. SEC Form 425

    The prospectus form that companies must file to disclose information ...
Hot Definitions
  1. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  2. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  3. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  4. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
  5. Retained Earnings

    Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested ...
  6. Demand Elasticity

    In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. ...
Trading Center