The terms “merger” & “amalgamation” & “acquisition” are often used interchangeably to denote the situation where 2 or more companies, keeping in view their long-term business interest, combine into 1 economic entity to share risks & financial rewards. However, in strict sense, merger is used for the fusion of 2 companies to achieve expansion & diversification. Amalgamation is an arrangement for bringing the assets of 2 companies under the control of 1 company, which may or may not be 1 of the original 2 companies. Amalgamation is the transfer of all or some part of the assets & liabilities of 1 or more existing business entities to another existing or new company.
Takeover is a business strategy where a person acquires control over the other company – either directly by acquiring assets or indirectly by controlling management. Takeover is a part of business strategy or planning for getting or acquiring control over another business to consolidate & acquire large share of the market. The legal eyes of raiders are on the lookout for cash/cows & high growth rate companies with low equity stake of promoters.