Megamerger

AAA

DEFINITION of 'Megamerger'

The joining of two large corporations, typically involving billions of dollars in value. The megamerger creates one corporation that may maintain control over a large percentage of market share within its industry.


Megamergers occur through the acquisition, merger, consolidation or combination of two existing corporations. Megamergers differ from traditional mergers due to their scale.

INVESTOPEDIA EXPLAINS 'Megamerger'

Megamergers in the recent past have included Pfizer's $68 billion deal for Wyeth (2009), Kraft's nearly $20 billion deal for Cadbury (2010) and the United–Continental merger (2010), which created the world's largest airline.


The first megamerger took place in 1901, when Carnegie Steel Corporation combined with its main rivals to form United States Steel.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. All Cash, All Stock Offer

    A proposal by one company to purchase all of another company's ...
  3. Mega Deal

    From the Greek megas, meaning great, this expression refers to ...
  4. Conglomerate

    A corporation that is made up of a number of different, seemingly ...
  5. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  6. Merger

    The combining of two or more companies, generally by offering ...
RELATED FAQS
  1. How is a tender offer used by an individual, group or company seeking to purchase ...

    A tender offer is made directly to shareholders in a publicly traded company to gain enough shares to force a sale of the ... Read Full Answer >>
  2. How does a company record profits using the equity method?

    A company that invests in another company and has majority control of it would record profits using the equity method. This ... Read Full Answer >>
  3. How does horizontal integration allow companies to share resources?

    In a horizontal integration, a company either acquires another company or merges with that company. This allows the resulting ... Read Full Answer >>
  4. What is the outlook for mergers and acquisitions in the utilities sector?

    Mergers and acquisitions (M&A) in the utilities sector will likely continue at a brisk pace for the foreseeable future, ... Read Full Answer >>
  5. Why should management teams focus more on horizontal integration?

    Management teams should focus more on horizontal integrations because they allow for economies of scale, economies of scope, ... Read Full Answer >>
  6. Why are the terms 'merger' and 'acquisition' always used together if they describe ...

    The terms "merger" and "acquisition" are used together because they both describe processes by which two companies become ... Read Full Answer >>
Related Articles
  1. Investing

    How To Profit From M&A Announcements

    We look at four strategies that seek to profit from merger and acquisitions announcements.
  2. Stock Analysis

    The CVS Target Deal: A Healthy Union?

    The CVS Health and Target deal should be a win for both. Here's an analysis with a twist.
  3. Investing News

    Most Important Mergers And Acquisitions Of 2015

    Nearly halfway through the year, 2015 is proving to be a big one for mergers and acquisitions.
  4. Fundamental Analysis

    Explaining Capital Employed

    Generally, capital employed refers to all of the assets used in a business that contribute to the company’s ability to earn revenue.
  5. Investing

    Salesforce Buyout

    It’s been over a month now since buyout rumors first began to circulate after sources revealed that Salesforce, the biggest cloud computing software company, was approached by a potential buyer. ...
  6. Entrepreneurship

    How to Exit Your Small Business with Grace

    Here is a guide for how best to leave your baby — your small business.
  7. Investing Basics

    10 Facts You Didn’t Know About Amazon

    Learn some interesting facts about Amazon.com Incorporated, the history behind Amazon's name and the hidden services and technologies that Amazon offers.
  8. Professionals

    The 15 Fastest-Growing RIAs

    Registered investment advisors are consolidating their business and assets. Here are 15 of the fastest-growing RIAs.
  9. Investing

    Nokia-Alcatel: Does the Risk Trump the Reward?

    Deals where two companies have lots to gain are great, but that doesn't always guarantee success.
  10. Investing

    American Airlines & US Airways Merger: It Matters!

    While the two airlines' merger creates a new giant in the industry and reduces choice for consumers and employees, investors should benefit.

You May Also Like

Hot Definitions
  1. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  2. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  3. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  4. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  5. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  6. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!