In business, consolidation or amalgamation is the merger and acquisition of many

smaller companies into a few much larger ones. In the context of financial
accounting, consolidation refers to the aggregation of financial statements of a group
company as consolidated financial statements. The taxation term of consolidation refers to
the treatment of a group of companies and other entities as one entity for tax purposes.
Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of
two or more undertakings into one undertaking, the shareholders of each blending
company, becoming, substantially, the shareholders of the blended undertakings. There
may be amalgamations, either by transfer of two or more undertakings to a new company,
or to the transfer of one or more companies to an existing company".
Overview
Consolidation is the practice, in business, of legally combining two or more organizations into a single
new one. Upon consolidation, the original organizations cease to exist and are supplanted by a new
entity.[4]
 Access to new technologies/ techniques
 Access to new clients
 Access to new geographies
 Cheaper financing for a bigger company
 Seeking for hidden or nonperforming assets belonging to a target company (e.g. real estate)
 Bigger companies tend to have superior bargaining power over their suppliers and clients
(e.g. Walmart)
 Synergies

There are three forms of business combinations:

 Statutory Merger: a business combination that results in the liquidation of the acquired company's
assets and the survival of the purchasing company.
 Statutory Consolidation: a business combination that creates a new company in which none of the
previous companies survive.
 Stock Acquisition: a business combination in which the purchasing company acquires the majority,
more than 50%, of the Common stock of the acquired company and both companies survive.
 Variable interest entity
 Parent-subsidiary relationship: the result of a stock acquisition where the parent is the
acquiring company and the subsidiary is the acquired company.
 Controlling Interest: When the parent company owns a majority of the common stock.
 Non-Controlling Interest or Minority Interest: the rest of the common stock that the other
shareholders own.
 Wholly owned subsidiary: when the parent owns all the outstanding common stock of the
subsidiary.
 In an amalgamation, the companies which merge into a new or existing company are
referred to as transferor companies or amalgamating companies. The resultant company
is referred to as the transferee company.