ASSIGNMENT

Summarize the various types of business consolidations

Statutory Consolidation
When businesses are combined into a new entity, the original companies cease to exist. By
combining these businesses together, they create a new, larger corporation. This is called
statutory consolidation, which is normally done through a merger transaction.

Statutory Merger
This kind of business consolidation takes place when an acquiring company liquidates the assets
of a company it buys. After doing so, the acquirer incorporates or dismantling the target
company's operations. So, unlike a statutory consolidation, the acquiring company keeps its
operations going, while the acquired entity no longer exists.

Stock Acquisition
This is a combination of businesses in which an acquiring company buys a majority share or
a controlling interest of another company. In order for it to be a majority share, the acquirer must
take out more than 50% in the target. In the end, both companies survive.

Variable Interest Entity

When an acquiring entity owns a controlling interest in a company that is not based on a majority
of voting rights, it is referred to as a variable interest entity. These entities are normally
established as special purpose vehicles (SPVs).