Compare the Difference Between Similar Terms

Difference Between

Home / Business / Management / Strategic Management / Organization Structure / Difference Between Amalgamation and Merger

Difference Between Amalgamation and Merger

June 1, 2011 Posted by Olivia

Amalgamation vs Merger

In corporate news, we often hear the terms amalgamation and mergers. Companies merge with each other to consolidate their assets so as to have more chances of survival and growth and also to have better access to new markets. While the final outcome of both mergers and amalgamations is same that is to have a larger company with more assets and customers, there are technical differences in the two terms that will be discussed in this article.

Takeovers, acquisitions, mergers and amalgamations are commonplace these days. The potential to grow is the prime motive behind both mergers and amalgamations. If we look up the dictionary, OED defines mergers and amalgamations as acts of combining two or more commercial entities into one or merging of two or more business concerns into one. With their definitions being nearly same, let us find the differences through their features and purposes.

Merger is fusion of two or more entities and it is a process in which the identity of one or more entities is lost (as is often seen when political parties merge). Amalgamation is blending together of two or more business entities in a fashion that both lose their identities and a new separate entity is born. In the case of a merger, the assets and liabilities of a company get vested into the assets and liabilities of another company. The shareholders of the company being merged become shareholders of the larger company (as when two or more smaller banks merge with a larger bank). On the other hand, in the case of amalgamation, shareholders of both (or more) companies get new shares allotted that are of a new company altogether.

There can be three types of mergers, namely horizontal, vertical and conglomerate. Horizontal merger helps in reducing competition by wiping out one of the companies in the market. Vertical merger refers to companies in which one is the supplier of raw material or other services to another. This type of merger is helpful to the manufacturing company to have an uninterrupted supply of essential goods and services and helps in concentrating on marketing efforts. Finally, conglomerate mergers are undertaken with an eye on diversification of business activities and having more clout in the market.

Mergers and amalgamations are well known endeavors in business circles for both growth and diversification though there are critics of these procedures saying they are undertaken to eliminate competition to secure more profits for the company and the shareholders.

Not all mergers and amalgamations are malignant in nature and in some cases; there may actually be a cost reduction in the production of goods and services thus benefiting end consumers.

In brief:

Amalgamation vs. Merger

• Mergers and amalgamations are procedures that are undertaken in business circle by two or more companies with a view to increase profits and to gain access to wider markets.

• In the case of mergers, two or more smaller companies lose their identities as they fuse into a larger company.

• In amalgamation, all combining companies may lose their identities and a new, independent company may be born.

Related posts:

Difference Between Trust and Company Difference Between Corporation and Cooperatives Difference Between Sole Trader and Limited Company Difference Between Companies Limited by Shares and Companies Limited by Guarantee Difference Between Memorandum of Association and Articles of Association

Filed Under: Organization Structure Tagged With: acquisitions, amalgamation, conglomerate, horizontal merger, Identity, merger, mergers, Takeovers, vertical merger

About the Author: Olivia

Olivia is a Graduate in Electronic Engineering with HR, Training & Development background and has over 15 years of field experience.

Leave a Reply Cancel reply

Request Article

Featured Posts

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and SARS

Difference Between Coronavirus and SARS

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Covid 19

Difference Between Coronavirus and Covid 19

You May Like

Difference Between Omega 3 and Omega 6 Fatty Acids

Difference Between Omega 3 and Omega 6 Fatty Acids

Difference Between Fear and Scared

Difference Between Ethanol and Methanol

Difference Between Ethanol and Methanol

Difference Between Eukaryotic and Prokaryotic Promoters

Difference Between Eukaryotic and Prokaryotic Promoters

Difference Between Counselling and Psychotherapy

Difference Between Counselling and Psychotherapy

Latest Posts

  • Difference Between Heat Flow and Heat Flux
  • Difference Between Homospory and Heterospory
  • Difference Between Chrysophytes and Euglenoids
  • Difference Between Acetone and Isopropyl Alcohol
  • Difference Between SDP and RDP
  • Difference Between Masking and Demasking Agents
  • Home
  • Vacancies
  • About
  • Request Article
  • Contact Us

Copyright © 2010-2018 Difference Between. All rights reserved. Terms of Use and Privacy Policy: Legal.