Mergers Merger is a financial tool that is used for enhancing long-term profitability by expanding their operations. Mergers occur when the merging companies have their mutual consent as different from acquisitions, which can take the form of a hostile takeover. The business laws in US vary across states and hence the companies have limited options to protect themselves from hostile takeovers. One way a company can protect itself from hostile takeovers is by planning shareholders rights, which is alternatively known as - poison pill. If we trace back to history, it is observed that very few mergers have actually added to the share value of the acquiring company. Corporate mergers may promote monopolistic practices by reducing costs, taxes etc.

2. Merger is a financial tool that is used for enhancing
long-term profitability by expanding their operations.
Mergers occur when the merging companies have their
mutual consent as different from acquisitions, which can
take the form of a hostile takeover.
The business laws in US vary across states and hence
the companies have limited options to protect themselves
from hostile takeovers. One way a company can protect
itself from hostile takeovers is by planning shareholders
rights, which is alternatively known as - poison pill. If
we trace back to history, it is observed that very few
mergers have actually added to the share value of the
acquiring company. Corporate mergers may promote
monopolistic practices by reducing costs, taxes etc.

3. Such activities may go against public welfare. Hence
mergers are regulated d supervised by the government,
for instance, in US any merger requireds the prior
approval of the Federal Trade Commission and the
Department of Justice. In US regulation son mergers
began with the Sherman Actvertical, conglomerate or
Mergers may be horizontal, in 1890.
congeneric, depending on the nature of the merging
companies.
Acquisitions or takeovers occur between the bidding and
the target company. There may be either hostile or
friendly takeovers. Reverse takeover occurs when the
target firm is larger than the bidding firm. In the
course of acquisitions the bidder may purchase the share
or the assets of the target company.