Merger
Short definition
A merger is two firms becoming one legal entity. Unlike an acquisition it is often a share exchange with shared control; a cash outflow is not required.
Detailed explanation
Legal form (absorption, newco) changes cash and tax. Synergy is an assumption of overlapping cost and cross-sell; if it fails, goodwill is impaired.
Competition and securities rules bind time and price. Minorities, exit rights and a valuation report separately discipline merger price.
Why it matters for the CFO
A merger rewrites debt capacity and covenants as the combination of two packs. Culture and systems delay cash synergy.
How to read it
A share exchange keeps cash debt down and dilutes. A cash merger moves leverage and DSCR at once.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.