Types of mergers

Are you a entrepreneur in talks about a possible merger with another company? If so, there are various types of mergers to choose from. A merger is an important decision that can have a major impact on the future of your organisation. And given that there is a lot involved: strategic interests, legal steps and tax conditions, there is no room for mistakes.

BrightOrange is happy to help you understand the different types of mergers and which one suits your situation best. Our relevant knowledge and clear approach make a successful merger a certain success. Make sure you are well informed.

Why do companies merge?

A fusion consists of two companies continuing together under the name of a new company, combining their resources and activities. There are various types of m&a and multiple reasons why companies consolidate. These might include a response to current market conditions such as increasing competition, an opportunity to increase market share, reduce costs, or combine knowledge and expertise.

All the more reason to take a closer look at the different kinds of mergers and the goals of your consolidation. This will help you decide which types of m&a are worth considering and whether a business acquisition or selling might be a better strategic outcome.

Three different kinds of merger

At BrightOrange, we distinguish between three types of mergers, which are often used in practice. You may have come across the terms share merger, business merger and legal merger. If not, we would be happy to explain the different kinds of mergers to you. Each type of fusion has specific legal and tax characteristics that are appropriate to the structure, financial situation and long-term goals of the companies involved.

Choosing the right type of merger is crucial for a successful, future-proof collaboration. But which one suits your situation? Keep reading to learn more about the different types of mergers!

Share merger

When we talk about types of mergers, a share merger is a common option. In a share merger, the shares ( or a part of them) are transferred to another corporation. The party with the majority of the shares naturally has control, but both corporations continue to exist. Although this type of merger is not regulated by law, there are certain steps that must be taken and conditions that must be met. What are these requirements? We will discuss this in this article: share merger step by step.

Types of m&a: business merger

A business merger is also referred to as an asset/liability transaction and makes it possible to take over the profitable parts of a company and leave out some of the less profitable ones. In this type of merger, the assets and liabilities are transferred separately to another company, but this is not as simple as it seems. There are many legal, competition law and tax conditions involved. Our specialists have drawn up a handy step-by-step plan with the relevant conditions for a business merger. This will give you a clear picture of what these corporate fusions mean for your company.

Legal merger

A legal merger is possible within companies, associations, foundations and mutual insurance associations, whereby two or more legal entities merge into a single entity. All assets and liabilities of the legal entity that ceases to exist are automatically transferred to the purchaser, without a separate transfer.

Of all types of mergers, the process involved in a legal merger is relatively straightforward and clearly regulated by law. However, there are also a number of conditions and interesting advantages to consider. Use our checklist to ensure a successful fusion.

Find out more about legal merger

BrightOrange assists you in selecting the appropriate kind of merger

At BrightOrange, we are happy to help you match the right types of mergers to your strategic goals. Do you want to quickly achieve economies of scale without too much legal hassle? Then a share merger may be the best choice. Do you want to truly integrate and become one organisation? Then a legal merger is the right step. And if you only want to transfer certain business assets, a business merger may be the right step.

Our specialists will help you make the right choice based on extensive research and a well-founded plan. We will guide you through every step of the process to ensure that nothing will stand in the way of a successful amalgamation. Enlist our assistance!

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