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Investment Dictionary


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Merger

 

A merger is a deal when two (theoretically possible more) companies are merging in between to achieve synergy. Mergers are part of M&A market and differ from acquisition by payment method for the stake. In merger case one company’s shares are paid by another company’s shares. Normally in such cases new shares are issued for the payment. 

 

Despite the fact that merger gives an reflection about both companies are equal, in reality there is always a company that is really more significant in the new entity and plays the main role in management. A lot of large M&A deals in current market aren’t neither pure merger neither pure acquisition because the payment structures are more difficult. Payments for the shares can be made in cash, shares, bonds, warrants and other financial instruments. A lot of M&A deals are somewhere in between merger and acquisition. 






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