“Merger and Amalgamation of Companies"
A merger and amalgamation are both terms used in the context of business combinations and corporate restructuring.
While they are related concepts, they have slightly different meanings.
Merger
A merger occurs when two or more companies decide to combine their businesses into a single entity.
In a merger, the companies involved usually pool their assets, liabilities, and operations to create a new entity.
The shareholders of the merging companies typically receive shares in the new entity as consideration for their ownership in the original companies.
Mergers can be classified as either horizontal (between companies in the same industry), vertical (between companies at different stages of the supply chain), or conglomerate (between unrelated companies).
Amalgamation
Amalgamation is a broader term that encompasses both mergers and acquisitions.
It refers to the process of combining two or more entities to form a new entity or to integrate the operations of one entity into another.
In an amalgamation, one entity may acquire the other(s) and absorb their assets, liabilities, and operations.
This can be done through a purchase of shares or assets, or through a statutory process defined by the laws of the jurisdiction.
