merger

Related to merger: Vertical Merger, Horizontal merger, Merger and acquisition

Merger

The combination or fusion of one thing or right into another thing or right of greater or larger importance so that the lesser thing or right loses its individuality and becomes identified with the greater whole.

In contract law, agreements are merged when one contract is absorbed into another. The merger of contracts is generally based on the language of the agreement and the intent of the parties. The merger of contracts is not the same as a merger clause, which is a provision in a contract stating that the written terms cannot be varied by prior or oral agreements.

Estates affecting ownership of land are merged where a greater estate and a lesser estate coincide and are held by the same individual. For example, merger occurs when a person who leases land from another subsequently is given ownership of it upon the death of the lessor who has so provided in his will.

In Criminal Law, the commission of a major crime that includes a lesser offense results in the latter being merged in the former. For example, the crime of rape includes the lesser offense of Sexual Abuse which is merged into one prosecution for rape.

Cross-references

Lesser Included Offense; Mergers and Acquisitions.

merger

n. 1) in corporate law, the joining together of two corporations in which one corporation transfers all of its assets to the other, which continues to exist. In effect one corporation "swallows" the other, but the shareholders of the swallowed company receive shares of the surviving corporation. A merger is distinguished from a "consolidation" in which both companies join together to create a new corporation. 2) in real property law, when an owner of an interest in property acquires a greater or lesser interest in the same property, the two interests become one. Examples: a person with a life estate is given the title to the property by inheritance, the life estate is merged with the titled interest. 3) another important form of merger occurs when a person acquires two parcels of land which were once a single lot that had been divided into two lots by a "lot split" granted by the city or county. If the minimum lot size has been increased by changes in local ordinances and the two lots are now sub-standard size, the buyer who acquires title in the two lots may find that they are "merged" into one lot and he or she has lost the right to build a house on each lot. To avoid this problem, the buyer should make sure title in each lot is obtained under a different name, i.e. husband taking one, and wife the other.

merger

1 the process whereby two or more companies come together to form a new single entity. The merger maybe effected as follows: by way of a scheme for amalgamation approved by the court; in the form of a takeover whereby one company acquires the shares of the other; where a new company is set up to acquire shares in the merging companies so that the shareholders of the merging companies receive shares in the new company. The arrangement maybe subject to COMPETITION POLICY. 2 the extinguishment of an estate, interest, contract, right or offence by its absorption into a greater one.

MERGER. Where a greater and lesser thing meet, and the latter loses its separate existence and sinks into the former. It is applied to estates, rights, crimes, and torts.

MERGER, estates. When a greater estate and less coincide and meet in one and the same person, without any intermediate estate, the less is immediately merged, that is, sunk or drowned in the latter; example, if there be a tenant for years, and the reversion in fee simple descends to, or is purchased by him, the term of years is merged in the inheritance, and no longer exists; but they must be to one and the same person, at one and the same time, in one and the same right. 2 BL Com. 177; 3 Mass. Rep. 172; Latch, 153; Poph. 166; 1 John. Ch. R. 417; 3 John. Ch. R. 53; 6 Madd. Ch. R. 119.
2. The estate in which the merger takes place, is not enlarged by the accession of the preceding estate; and the greater, or only subsisting estate, continues, after the merger, precisely of the same quantity and extent of ownership, as it was before the accession of the estate which is merged, and the lesser estate is extinguished. Prest. on Conv. 7. As a general rule, equal estates will not drown in each other.
3. The merger is produced, either from the meeting of an estate of higher degree, with an estate of inferior degree; or from the meeting of the particular estate and the immediate reversion, in the same person. 4 Kent, Com. 98. Vide 3 Prest. on Conv. which is devoted to this subject. Vide, generally, Bac. Ab. Leases, &c. R; 15 Vin. Ab. 361; Dane's Ab. Index, h.t.; 10 Verm. R. 293;; 8 Watts, R. 146; Co. Litt. 338 b, note 4; Hill. Ab. Index, h.t.; Bouv. Inst; Index, h.t.; and Confusion; Consolidation; Unity of Possession.

MERGER, crim. law. When a man commits a great crime which includes a lesser, the latter is merged in the former.
2. Murder, when committed by blows, necessarily includes an assault and battery; a battery, an assault; a burglary, when accompanied with a felonious taking of personal property, a larceny in all these, and similar cases, the lesser crime is merged in the greater.
3. But when one offence is of the same character with the other, there is no merger; as in the case of a conspiracy to commit a misdemeanor, and the misdemeanor is afterwards committed in pursuance of the conspiracy. The two crimes being of equal degree, there can be no legal merger. 4 Wend. R. 265. Vide Civil Remedy.

MERGER, rights. Rights are said to be merged when the same person who is bound to pay is also entitled to receive. This is more properly called a confusion of rights, or extinguishment.
2. When there is a confusion of rights, and the debtor and creditor become the same person, there can be no right to put in execution; but there is an immediate merger. 2 Ves. jr. 264. Example: a man becomes indebted to a woman in a sum of money, and afterwards marries her, there is immediately a confusion of rights, and the debt is merged or extinguished.

MERGER, torts. Where a person in committing a felony also commits a tort against a private person; in this case, the wrong is sunk in the felony, at least, until after the felon's conviction.
2. The old maxim that a trespass is merged in a felony, has sometimes been supposed to mean that there is no redress by civil action for an injury which amounts to a felony. But it is now established that the defendant is liable to the party injured either after his conviction; Latch, 144; Noy, 82; W. Jones, 147; Sty. 346; 1 Mod. 282; 1 Hale, P. C. 546; or acquittal. 12 East, R. 409; 1 Tayl. R. 58; 2 Hayw. 108. If the civil action be commenced before, the plaintiff will be nonsuited. Yelv. 90, a, n. See Hamm. N. P. 63; Kely. 48; Cas. Tempt. Hardw. 350; Lofft. 88; 2 T.R. 750; 3 Greenl. R. 458. Butler, J., says, this doctrine is not extended beyond actions of trespass or tort. 4 T. R. 333. See also 1 H. Bl. 583, 588, 594; 15 Mass. R. 78; Id. 336. Vide Civil Remedy; Injury.
3. The Revised Statutes of New York, part 3, c. 4, t. 1, s. 2, direct that the right of action of any person injured by any felony, shall not, in any case, be merged in such felony, or be in any manner affected thereby. In Kentucky, Pr. Dec. 203, and New Hampshire, 6 N. H. Rep. 454, the owner of stolen goods, may immediately. pursue his civil remedy. See, generally, Minor, 8; 1 Stew. R. 70; 15 Mass. 336; Coxe, 115; 4 Ham. 376; 4 N. Hanp. Rep. 239; 1 Miles, R. 212; 6 Rand. 223; 1 Const. R. 231; 2 Root, 90.

merger

Merger

(1) Acquisition in which all assets and liabilities are absorbed by the buyer. (2) More generally, any combination of two companies. The firm's activity in this respect is sometimes called M&A (Merger and Acquisition)

Merger

A decision by two companies to combine all operations, officers, structure, and other functions of business. Mergers are meant to be mutually beneficial for the parties involved. In the case of two publicly-traded companies, a merger usually involves one company giving shareholders in the other its stock in exchange for surrendering the stock of the first company. See also: Acquisition.

merger

A combination of two or more companies in which the assets and liabilities of the selling firm(s) are absorbed by the buying firm. Although the buying firm may be a considerably different organization after the merger, it retains its original identity. Compare consolidation. See also downstream merger, synergy.

Merger.

When two or more companies consolidate by exchanging common stock, and the resulting single company replaces the old companies, the consolidation is described as a merger.

The shareholders of the old companies receive prorated shares in the new company. A merger is typically a tax-free transaction, meaning that shareholders owe no capital gains or lost taxes on the stock that is being exchanged.

A merger is different from an acquisition, in which one company purchases, or takes over, the assets of another. The acquiring company continues to function and the acquired company ceases to exist. Shareholders of the acquired company receive shares in the new company in exchange for their old shares.

Despite their differences, mergers and acquisitions are invariably linked, often simply described as M&As.

merger

amalgamation

the combining together of two or more firms into a single business on a basis that is mutually agreed by the firms' managements and approved by their shareholders. Mergers are one form of EXTERNAL GROWTH involving firms in expanding in a horizontal, vertical or conglomerate direction:

Horizontal mergers (mergers between firms in the same market) may enable the firms to lower their costs, by taking advantage of the economies of large-scale production and marketing and by increasing the market share of the combined group, thereby putting it on a stronger competitive footing (see HORIZONTAL INTEGRATION);
Vertical mergers (mergers between firms operating at different levels in the same market) may enable the firms to lower their costs by combining together in one operation a number of sequentially linked processes and by cutting stockholding costs, while control of inputs and market outlets gives the firm greater security of supplies and access to distribution channels, often at a competitive advantage over non-integrated rivals (see VERTICAL INTEGRATION);
Conglomerate mergers (mergers between firms engaged in unrelated markets) enable risk to be spread, and provide an opportunity to develop better the resources of each by cross-transference of management, production and marketing expertise and by the targeting of finance to areas of growth potential (see DIVERSIFICATION).

In terms of their wider impact on the functioning of market processes, mergers may, on the one hand, promote greater efficiency in resource use and lower market costs and prices, or, on the other hand, reduce competition and heighten the dangers of monopolistic control over markets. Thus they may simultaneously involve both benefits and detriments. For this reason, in the UK, under the FAIR TRADING ACT, 1973, mergers and TAKEOVERS which create or extend a firm's market share of a particular product in excess of 25%, or where the value of assets combined is over £70 million, can be referred by the OFFICE OF FAIR TRADING to the COMPETITION COMMISSION to determine whether or not they are in the public interest. See MARKET ENTRY, BARRIERS TO ENTRY, CITY CODE ON TAKEOVERS AND MERGERS, DEMERGER, BUSINESS STRATEGY, MERCHANT BANK.

merger

amalgamation

the combining together of two or more firms. Unlike a TAKEOVER, which involves one firm mounting a ‘hostile’ TAKEOVER BID for the other firm without the agreement of the victim firm's management, a merger is usually concluded by mutual agreement. Three broad categories of merger may be identified:

horizontal mergers between firms that are direct competitors in the same market;
vertical mergers between firms that stand in a supplier-customer relationship;
conglomerate mergers between firms that operate in unrelated markets and are seeking to diversify their activities.

From the firm's point of view, a merger may be advantageous because it may enable the firm to reduce production and distribution costs, enable it to expand its existing activities or move into new areas, or remove unwanted competition and increase its market power.

In terms of their wider impact on the operation of market processes, mergers may, on the one hand, promote greater efficiency in resource use or, on the other hand, by reducing competition, lead to a less efficient allocation of resources.

Usually, any benefit that comes from a merger will depend upon the achievement of greater efficiency in some branch of the enlarged firm's operations. Several important sources of greater efficiency may be distinguished. Horizontal mergers frequently allow firms to secure low-cost operation by realizing ECONOMIES OF SCALE in manufacture and distribution and RATIONALIZATION opportunities. In addition, the combined organization may have access to superior technical know-how and financial resources previously available to only one of the firms. Vertical mergers may make possible benefits in efficiency of production by making possible more comprehensive production planning, particularly where successive processes are closely linked, and permit economies in stock holding and distribution of goods. Conglomerate mergers may yield economies in overheads (finance, administration and marketing expenditure) and may lead to an important cross-fertilization of ideas and attitudes, particularly where the acquiring company is notably well managed and cost-conscious.

While mergers may result in greater efficiency, thereby enhancing consumer welfare, they may also serve to increase MONOPOLY power. This is most clearly seen in the case of horizontal and vertical mergers. Horizontal mergers prima facie increase the level of SELLER CONCENTRATION in the market by reducing the number of independent sources of supply. Where the merging firms are already substantial suppliers, this may reduce effective competition and permit the enlarged group more control over the market and discretion over prices. A vertical merger can produce an increase in market power in a variety of ways. If a customer firm, for example, takes over a supplier, and if the supplier is large in relation to other suppliers, other (non-integrated) customers may find themselves forced to buy from the merged supplier and then sell their products in competition with the merged customer firm. This puts the merged group in a powerful position to discriminate in prices and availability of supplies and so ‘squeeze’ the profits of other non-integrated suppliers. Superficially, conglomerate mergers appear to have little relevance to the monopoly power issue, but it is to be noted that the conglomerate may have an opportunity to affect the state of competition in a number of separate markets, by internal transfers of resources, and thus to exercise a larger degree of market power against rival companies than its market share in individual markets would otherwise permit.

In sum, mergers may involve, simultaneously, both benefits and detriments. In the UK, under the FAIR TRADING ACT 1973, mergers that create or extend a firm's market share of a particular product in excess of 25%, or where the value of assets acquired is over £70 million, can be referred by the OFFICE OF FAIR TRADING to the COMPETITION COMMISSION to determine whether or not it is in the public interest. See also COMPETITION POLICY (UK), COMPETITION POLICY (EU), WILLIAMSON TRADEOFF MODEL, HORIZONTAL INTEGRATION, VERTICAL INTEGRATION, DIVERSIFICATION, CITY CODE, DEMERGER.

merger

(1) With regard to corporations,a legal joining together of two or more corporations into one entity or an entity with common ownership. A horizontal merger occurs between or among competitors,and a vertical merger occurs when suppliers, shippers, retailers, and such in a common industry join together. (2) With regard to real estate: (a) The joining of two or more interests in real estate into one owner, so that the separate interests,or estates,disappear. If a property owner with a right-of-way easement over her neighbor's land then purchases the neighbor's land, the easement is extinguished. If she then sells her first property to another, the new owner cannot now claim the benefit of the old right-of-way easement, because it was merged into land ownership. (b) The concept that a real estate contract becomes merged into the deed, so that provisions in the contract, but not in the deed, are not enforceable. This is almost always a question of intent, which means a jury gets to decide. The better course is to specify in the contract that all representations and warranties and all promises and agreements survive the deed. (c) The concept that negotiations are merged into a final contract and cannot be used to vary the terms of the contract.

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Cross-references

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Merger.

merger

amalgamation

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amalgamation

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MERGER

merger

Synonyms for merger

noun union

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Synonyms for merger

noun something produced by mixing

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Synonyms for merger

noun the combination of two or more commercial companies

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Related Words

noun an occurrence that involves the production of a union

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