- CFA Exams
- CFA Level I Exam
- Topic 4. Corporate Issuers
- Learning Module 18. Mergers and Acquisitions
- Subject 1. Definitions and Classifications
CFA Practice Question
If two companies are approximately of a similar size, a ______ is the most likely merger form.
A. Statutory merger.
B. Acquisition.
C. Consolidation.
Explanation: Consolidation is common in mergers where both companies are approximately the same size.
User Contributed Comments 1
| User | Comment |
|---|---|
| krisscfa | This topic is discussed under "Forms of Business Integration" 1. Statutory Merger : Acquiring company acquires all of the Target's assets and liabilities. Target ceases to exist thereafter 2.Subsidiary Merger : Target Company becomes subsidiary of the acquirer. Subsidiary mergers typically occur when the target has a well known brand tht acquirer wants to retain Eg : P&G buying Gillette 3. Consolidation : Both companies combine to form a new company. Consolidations are common in mergers when both companies are of similar size |