Definition of merger

In connection with a merger, the total assets and liabilities of one or more companies are transferred to another company, after which the companies transferring their assets and liabilities will dissolve without liquidation.

The continuing company may either be an existing company or a company created as a consequence of the merger.

Vertical and horizontal mergers

Corporate law distinguishes between vertical and horizontal mergers. A vertical merger is a merger between a parent company and a subsidiary. A horizontal merger is a merger between two or more companies with no mutual parent/subsidiary relationship.