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wo or more independent business corporations into a single enterprise, usually the absorption of one or more firms by a dominant one.A merger may be accomplished through 3 methods: by one firm purchasing the other’s assets with cash or its securities, or by purchasing the other’s shares, or stock or by issuing its stock to the other firm’s stockholders in exchange for their shares in the acquired firm (thus acquiring the other company’s assets and liabilities) .Mergers are of several different types: such as horizontal mergers, which refers to both firms produce the same commodity or service for the same market; vertical mergers, which means the acquired company becomes consumer or supplier of the acquiring one; market-expanding merger, through which both are offering different commodities for different markets. In China, it is generally acknowledged that enterprise mergers refers to one company’s purchasing on some other companies property right, leading to that the latter ones lost their corporate capacity or corporation. While for acquisition, in China, it’s more close to the action that a company obtains the controlling right over some other ones.
There are three forms of mergers and acquisitions: https://www.51lunwen.org/law/ horizontal mergers and acquisitions, vertical mergers and acquisitions and conglomerate mergers and acquisitions.Horizontal mergers and acquisitions happen among the same manufacturing departments or the same sort of operations, which result in economies of scale come into being rapidly as well as improving concentration ration of industry. On the other hand, it will cause monopoly easily, lowering the whole economic-function efficiency. This kind of mergers and acquisitions contribute to the elimination of competition among companies, and the unification of different companies’ operations will change substantial market power then maybe followed by increasing price through producing less. What’s more, for the more and more concentration is blasting fuse of tacit coordination of behaviour. So this kind is always being regulated by antitrust organizations.Vertical mergers and acquisitions refers to an outstanding company concludes alliances with some other companies, such as transportation department or selling department, which will have significant impact on its production . This onehas two basic forms: forward integrationand backward integration, through which a company will control the supplier and customer. This kind of mergers and acquisitions help to form development and production integration. It internalizes all transactions between manufacturers and dealers, creating a partnership. And the internalization makes management more efficient ways to monitor and improve performance. All this kind of mergers and acquisitions change is the pattern of handling an industry behaviour, which means it optimises the distribution of resource. This kind of mergers and acquisitions is free of antitrust law and other regulations. The last kind of mergers and acquisitions is called conglomerate mergers and acquisitions. It happens among companies, operating in separate markets, which are not competitors or potential customers and dealers. Its purpose is reducing the risk of managing the same business for a long time. Compared with horizontal and vertical ones, this kind is the last one to be viewed as leading to monopoly and it has no direct effect on competition. No change will occur in the number of firms the acquiring or acquired firm's