Definition: Consolidation (as type of merger)

Category: SNA

Consolidation is a type of merger which refers to a business combination whereby two or more corporations join to form an entirely new corporation. All corporations involved in the merger cease to exist and their shareholders become shareholders of the new corporation. The terms consolidation and merger are frequently used interchangeably. However, the distinction between the two is usually in reference to the size of the combining corporations. Consolidation relates to an operation where the combining corporations have similar sizes while merger generally implies significant differences (§ 21.21). http://ec.europa.eu/eurostat/ramon/statmanuals/files/SNA2008.pdf