A merger can best be deﬁned as:
A) A combination of ﬁrms that have been joined by merger, consolidation or acquisition.
B) The complete absorption of one company by another, where the acquiring ﬁrm retains its identity and the acquired ﬁrm ceases to exist as a separate entity.
C) A merger in which a new ﬁrm is created and both the acquired and acquiring ﬁrm cease to exist.
D) A public offer by one ﬁrm to directly buy the shares from another.
E) A corporate takeover bid communicated to the shareholders through direct mail.

Question

Quizplus · Accepted Answer

A merger is a transaction where one company acquires another company and the acquired company ceases to exist as a separate entity. In a merger, the acquiring company retains its identity and incorporates the acquired company's assets and liabilities into its own operations. Option B defines a merger as the complete absorption of one company by another.

A Merger Can Best Be Deﬁned As