Primary navigation:

QFINANCE Quick Links
QFINANCE Topics
QFINANCE Reference
Add the QFINANCE search widget to your website

Home > QFINANCE Dictionary > Definition of merger

Definition of

merger

Mergers & Acquisitions

when one organization buys and combines with another the amalgamation of two or more organizations under single ownership, through the direct acquisition by one organization of the net assets or liabilities of the other. A merger can be the result of a friendly takeover, which results in the combining of companies on an equal footing. After a merger, the legal existence of the acquired organization is terminated. There is no standard definition of a merger, as each is different, depending on what is expected from the merger, and on the negotiations, strategy, stock and assets, human resources, and stockholders of the players. Four broad types of mergers are recognized. A horizontal merger involves firms from the same industry, while a vertical merger involves firms from the same supply chain. A circular merger involves firms with different products but similar distribution channels. A conglomerate company is produced by the union of firms with few or no similarities in production or marketing but that come together to create a larger economic base and greater profit potential.

Related definitions of "merger"

Definitions of ’merger’ and meaning of ’merger’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’merger’ and other financial terms with our online QFINANCE Financial Dictionary.

Back to top