Merger Guide, Meaning , Facts, Information and Description
- This page deals with the combination of two companies into one. For information about other uses of the word "merge", see merge.
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2 Issues 3 Major mergers since 1990 4 See also |
Classifications of mergers
A unique type of merger called a reverse merger is used as a way of going public without the expense and time required by an IPO.
The occurrence of a merger often raises concerns in anti-trust circles. Devices such as the Herfindahl index can analyze the impact of a merger on a market and what, if any, action could prevent it. Regulatory bodies such as the European Commission and the United States Department of Justice may investigate anti-trust cases for monopolies dangers, and have the power to block mergers.
The completion of a merger does not ensure the success of the resulting organization; indeed, many mergers result in a net loss of value due to problems. Correcting problems caused by incompatibility—whether of technology, equipment, or corporate culture— diverts resources away from new investment, and these problems may be exacerbated by inadequate research or by concealment of losses or liabilities at one of the partners. Overlapping subsidiaries or redundant staff may be allowed to continue, creating inefficiency, and conversely the new management may cut too many operations or personnel, losing expertise and disrupting employee culture. These problems are similar to those encountered in takeovers.
This is an Article on Merger. Page Contains Information, Facts Details or Explanation Guide About Merger Issues
Major mergers since 1990
See also