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When two or more companies decide to combine and become one entity, it is called a merger.
Merger definition
When two or more companies decide to combine and become one entity, it is called a merger.
Mergers usually take the form of a stock swap between shareholders. Multiple listings on stock exchanges will have to form one listing, so shareholders in one firm are given securities in the other to compensate for the loss of their stock.
Although they are often referred to under the same heading of mergers and acquisitions (or M&A), mergers differ significantly from acquisitions. They are usually mutually agreed upon by – and end in a new company formed of – all the firms involved.
Share dealing news
Visit our share dealing news section for the latest news and analysis on world markets, industries and currencies.
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