Mergers

Types of Mergers

1. Merger by acquisition

A merger by acquisition means an operation in which a company acquires all the assets and liabilities of one or more other companies that is or are dissolved without going into liquidation in exchange for the issue to the members of that company or those companies of shares in the first-mentioned company, with or without any cash payments.

2. Merger by absorption

Merger by absorption means an operation whereby, on being dissolved and without going into liquidation, a company transfers all of its assets and liabilities to a company that is the holder of all the shares representing the capital of the first-mentioned company.

3. Merger by formation of a new company

Merger by formation of a new company means an operation in which one or more companies, on being dissolved without going into liquidation, transfers all its or their assets and liabilities to a company that it or they form — the “other company”— in exchange for the issue to its or their members of shares representing the capital of the other company, with or without any cash payment.

How to Effect a Merger

A merger may be approved by either using the Summary Approval Procedure (SAP) INSERT LINK or seeking Court Approval. The SAP is the most common and straightforward way of approving a merger.

Tax and Legal Advice

Prior to commencing any merger appropriate tax and legal advice should be obtained as the merger will have significant impact on the tax implications, employees, contract etc.