Question

Difference between merger and amalgamation

Answer 1

Summary of differences:

Merger Amalgamation

Creation Two or more companies who share similar operations or are engaged in the same line of business combine to expand their services or diversify their activities A bigger and financially stronger entity takes over a smaller one

Types Horizontal, vertical, and conglomeration Amalgamation in the nature of purchase and amalgamation in the nature of merger

Legal identity Merger gives rise to a new entity The acquiring company retains its identity while the acquired company’s identity is dissolved

Owners of shares the shareholders of the companies who are parties to the merger become the shareholders of the new entity shareholders of the acquired company is added to the existing number of shareholders of the acquiring company