Merger
 

 

The combining of two or more business organizations into one unit with a view to increasing overall efficiency. Mergers occur mainly in the world of limited companies, where the owners or directors of separate companies agree that the creation of one single company to carry out the objectives of each will be to the greatest interest of all concerned. The average merger is rather different from a takeover bid, where one company buys up another, often against the wishes of the latter's board of directors. Mergers are generally amicable and arranged for the mutual benefit of the companies concerned. though they may still need to be approved by the monopolies and mergers commission and survive the scrutiny of the panel supervising the city code on take-overs and mergers. When companies merge, the owners tend to remain much the same and members of the old companies are usually offered equivalent holdings in the new company.

Reference: The Penguin Business Dictionary , 3rd edt.