A merger or consolidation is when two firms are combined (this is a form of acquisition )
Different types of mergers include:
- 1) Statutory merger
- The statutory merger occurs where A Inc. acquires B Inc. by B Inc. merging into A Inc. The statutory merger is accomplished by the formulation of a plan of merger which is approved initially by the baord of directors of both companies, folllowed by a vote of both shareholder bodies. After the filing of the articles of merger with the Secretary of State, B Inc. loses its separate corporate existence.
- 2) Consolidation
- Both A Inc. and B Inc. merge into a new company, C Inc. A Inc. and B Inc. both lose their separate existence. This can happen when both A Inc. and B Inc. have significant identities and want to combine to form a new company.
- 3) Triangular merger
- In a triangular merger the acquiring party ("A" Inc") form a wholly ownd subsidiary (As) and B Inc. merges into As. B Inc. shareholder recieve consideration in exchange for their B shares. Shares of As owned by A Inc. are unaffected. As is still wholly owned by A Inc. if
- 4) Reverse triangular merger
- 5) Short Form Merger