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INTRODUCTION TO MERGERSAND ACQUISITIONS
All our daily newspapers are filled with cases of mergers, acquisitions, spin-offs, tenderoffers, & other forms of corporate restructuring. No firm is regarded safe from a takeoverpossibility. On the more positive side Mergers & Acquisitions may be critical for thehealthy expansion and growth of the firm. Successful entry into new product andgeographical markets may require Mergers & Acquisitions at some stage in the firm'sdevelopment. Successful competition in international markets may depend on capabilitiesobtained in a timely and efficient fashion through Mergers & Acquisition's.
Merger is defined as combination of two or more companies into a single company whereone survives and the others lose their corporate existence. In other words, two entitiesmerge together to form a single entity having combined organizational norms and culture.The survivor acquires all the assets as well as liabilities of the merged company orcompanies. Generally, the surviving company is the buyer, which retains its identity, andthe extinguished company is the seller.Merger is also defined as amalgamation. Merger is the fusion of two or more existingcompanies. All assets, liabilities and the stock of one company is transferred to TransfereeCompany in consideration of payment in the form of :
Equity shares in the transferee company
Debentures in the transferee company
A mix of the above modes