what is mergers and acqusitions? what is holding company?
Answer Posted / kalyani
A general term used to refer to the consolidation of
companies. 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.
Corporation that owns enough voting stock in another
corporation to influence its board of directors and
therefore to control its policies and management. A holding
company need not own a majority of the shares of its
subsidiaries or be engaged in similar activities. However,
to gain the benefits of tax consolidation, which include
tax-free dividends to the parent and the ability to share
operating losses, the holding company must own 80% or more
of the subsidiary's voting stock.
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