What Is the Difference Between Merger and Consolidation?

What Is the Difference Between Merger and Consolidation?

What Is the Difference Between Merger and Consolidation?

In a merger, one corporation, known as the survivor, takes over another corporation, known as the merged. A consolidation is the joining of two corporations to form a new, third corporation.

When a merger is carried out against the wishes of the merged company's board of directors, it is referred to as a hostile takeover. The stockholders of the merged company are either bought out or offered stock in the survivor company. A consolidation may involve two or more corporations. Once a consolidation is complete, the original corporations are defunct and no longer exist. The new corporation chooses its own board of directors and corporate officers.