Business Homework 2 - 1. A merger is a combination of two...

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1. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another with no new company being formed. A merger occurs when one firm assumes all the assets and all the liabilities of another. The acquiring firm retains its identity, while the acquired firm ceases to exist. A majority vote of shareholders is generally required to approve a merger. A recent example is the merger of Ciba- Geigy and Sandoz, two pharmaceutical giants based in Switzerland but with far-reaching global operations. Both companies were developing gene therapy treatments for various forms of cancer and other serious illnesses. These research efforts held significant promise for new treatments within the next few years. On the other hand, an acquisition is when one company purchases another company. The company that was bought is now dissolved into the buying company and becomes part of it under then name of the buying company. The buying company then assumes all the assets and all the liabilities of the company that they bought. A well-known example of a nonprofit acquisition occurred in 2000, when America's Second Harvest and Foodchain merged to form a
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This note was uploaded on 04/09/2008 for the course BUSINESS 102 taught by Professor Obi during the Spring '06 term at Coast Guard Academy.

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Business Homework 2 - 1. A merger is a combination of two...

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