Mergers and amalgamations are vital corporate transactions and completely overhaul and transform the structure of the merging entities. A ‘merger’ is a combination of two or more entities into one; the desired effect being not just the accumulation of assets and liabilities of the distinct entities, but organization of such entity into one business.
|
REASON OF M&A ·Expansion
and Diversification ·Optimum
Economic Benefit ·De-risking
Strategy ·Scaling
up of operation for competitive advantages ·Increase
the Market capitalization ·Cost
reduction by reducing overheads ·Increasing
the efficiencies of operations ·Tax
benefits ·Access
foreign markets |
TERMS Amalgamation– means combination
of two or more independent business corporations into a single enterprise. Demerger– means transfer and
vesting of an undertaking of a company into another company Reconstruction- means
re-organization of share capital in any manner; varying the rights of
shareholders and/or creditors Arrangement- All modes of
reorganizing the share capital, including interference with preferential and
other special rights attached to shares |