Glossary
/Merger
Two separate companies decide to drop their individual identities and join forces to become one single, larger business. Usually, a bigger company completely absorbs a smaller one. Shareholders of the smaller companies don't just lose their investment; they receive new shares in the larger company determined by a fixed swap ratio. Companies do this to eliminate competition, reduce costs, or gain a larger market share. The whole process takes months and strictly requires SEBI approval to ensure retail investors aren't getting a bad deal.