In a merger, one business unit acquires the other business unit. The acquiring company retains its entity while the acquired loses its entity.

Mergers & acquisitions are both changes in control of companies that involve combining the operations of multiple entities into a single company. Analyzing the financial impact of the acquisition. Performing due diligence. Developing the purchase proposal and negotiating strategy a single business unit”.

What is Merger?
In a merger, one business unit acquires the other business unit. The acquiring company retains its entity while the acquired loses its entity.


What is Amalgamation?
Amalgamation is a type of Merger Process in which two or more companies combine their businesses to form an entirely new entity/Company. Amalgamation is an appropriate arrangement wherein two or more companies operate in the same line of business thus amalgamation helps in reduction in operational cost due to operational synergy.


Differences between Merger & Amalgamation
Though mergers and amalgamations are form of complete consolidation there are certain differences between them. They are given in the following table:

Points of distinctionAmalgamationMerger
1. FormationTwo or more independent units combine together to form a new unit.One unit acquires another. Generally the larger and financial stronger unit takes over a smaller unit.
2. IdentityThe combining units lose their individual identity.The acquirer retains the identity whereas the acquired company looses its identity. For e.g. when HDFC Bank acquired Times Bank, the acquirer (HDFC Bank) retained the identity whereas the acquired (Times Bank) lost its identity.
3. ShareholdersShareholders of all the combining units become shareholders in the newly created enterprise.Shareholders of the acquired company become the share holders of the acquiring company.
4. SharesShares of the newly created entity is given to the shareholders of the combining units.Shares of the acquirer company is given to the shareholders of the acquired company.
5. InitiativeThe initiative to amalgamate is generally taken by the combining units.Initiative is generally taken by the acquirer.
Merger are broadly of two types:
1. Co-Generic – A. Horizontal
                             B. Vertical : it can be Forward Integration and Backward Integration.
2. Conglomerate :

Merger has to be seen in conjunction with:

Income Tax Act, Stamp Act, AS-14, FEMA, Companies Act, NBFC Norms ( if applicable), Secretarial Standard, Valuation Rule etc.

V.K.Tulsyan & Co. LLP is a recognized name in providing reliable Merger & Amalgamation services to the clients. Our professionals have gained ample knowledge in this field and efficiently deal with the entire situation with ease. Further, we are proficient in preparing all the necessary documents involved in Merger & Amalgamation process