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<br>There are actually two types of merger and acquisitions, in the business world.The concept of merger is a technique take make a business grow.
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The business world is full of amazements and powerful motives. • Once a person is in the business thing, no one can deny the fact that a business is the most energetic task that is to be done with full concentration and dedication. • And without these qualities, the business might just collapse.
There are actually two types of definitions of merger, that is, one as in general and the other as in finance. • Here, we shall discuss about one of the important terms that is often used in the business world, and that is merger. We shall also know about what merger and acquisitions are in the business world.
In general terms a merger is absorption of one or more companies by an already existing single company. • And in finance, the word merger is defined as an act or a process of purchasing equity share, which are also known as ownership shares, of one or more companies by a single existing company. • The concept of merger is a technique take make a business grow. It is not often termed as a business combination.
In fact the merger process is done on a permanent basis. Basically merger is done between two companies but however, if some of the terms are valid then their can also be a merger of more than two companies. • So as to understand the next points of the merger process, one must also know about two more terms, and they are- Acquiring Company and Acquired Company.
Well, an acquiring company is a single existing company that tends to purchase the majority of equity shares of one or more companies, whereas, an acquired company are those companies that tend to surrender the majority of their equity shares to an acquiring company.
Now, what happens is that, during a merger, an acquiring and an acquired company come together to decide and execute a merger agreement between them. • And after a merger, the acquiring company survives whereas the acquired company does not survive anymore. And then the acquired company stops to exist in the business.
The thing is that, the merger does not result in the formation of a new company and apart from that, the management of the acquiring company continues to lead the merger. • It is kind of a good strategy for those business owners who has a dream of building the best company, the merger process with another company will be a great opportunistic task for them.
