Mergers: Definition, Types, and Corporate Impact

A merger is the legal consolidation of two or more companies into a single entity. The surviving company assumes all assets, liabilities, and shareholder interests.

Key Characteristics

• Friendly merger: Boards approve; recommended to shareholders.
• Hostile merger: Target board opposes; acquirer appeals directly to shareholders (tender offer, proxy fight).
• Statutory merger: One entity survives; the other dissolves.
• Consolidation: Both dissolve; a new entity forms.

Strategic Rationale

• Economies of scale / scope
• Market expansion, diversification
• Synergies (cost savings, revenue enhancement)
• Tax attributes, talent acquisition

Regulatory Review

Subject to antitrust scrutiny (Hart-Scott-Rodino in U.S., similar regimes globally). Approval may require divestitures.