Merger

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Dictionary Says

Definition of '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.
Investopedia Says

Investopedia explains 'Merger'

Basically, when two companies become one. This decision is usually mutual between both firms.

Related Definitions

  • Acquisition

    A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part ...
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  • Acquisition Premium

    The difference between the actual cost for acquiring a target firm versus the estimate made of its value before the acquisition.
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  • De-Merger

    A business strategy in which a single business is broken into components, either to operate on their own, to be sold or to be dissolved. A de-merger allows a large company, such as a ...
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    • Forward Triangular Merger

      A type of merger that occurs when the subsidiary of the acquiring corporation merges with the target firm.
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    • 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 ...
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    • Reverse Triangular Merger

      When the subsidiary of the acquiring corporation merges with the target firm. In this case, the subsidiary's equity merges with the target firm's stock. As a result of the merger, the ...
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    • Sweetheart Deal

      A merger, a sale or an agreement in which one party in the deal presents the other party with very attractive terms and conditions. The terms of a sweetheart deal are usually so ...
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    • Whitewash Resolution

      A European term used in conjunction with the Companies Act Of 1985, which refers to a resolution that must be passed before a target company in a buyout situation can give financial ...
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    • Target Firm

      A company which is the subject of a merger or acquisition attempt. A takeover attempt can take on many different flavors, depending on the attitude of the target firm toward the ...
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    • Merger Securities

      A non-cash asset paid to the shareholders of a corporation that is being acquired or is the target of a merger. Theses securities generally consist of bonds, options, preferred stock and ...
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