Merger
Fundamental analysisAlso called: Acquisition, M&A
A transaction combining two companies into one entity.
In plain terms
The acquirer pays a premium today for benefits that are uncertain and deferred. Most disappoint.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 11 terms
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Merger spread
Trading & ordersThe difference between the value a fixed exchange ratio or cash offer implies for a target share and the price the target actually trades at.
In plain terms
Payment for the wait and for the chance the scheme never completes. It narrows as approvals land and gaps out the moment one is in doubt.
Demerger
Fundamental analysisAlso called: Spin-off
Separating a division into an independently listed company, with shares issued to existing holders.
In plain terms
No premium is paid and each business gets its own multiple, which is why the record is better than for acquisitions.
Scheme merger
Market basicsThe combining of one mutual fund scheme into another, after which unitholders hold units of the surviving scheme.
In plain terms
A change in fundamental attributes, so it arrives as a written notice with a no-load exit window. The waiver covers the load, not the capital gains tax, which is usually the larger number.
Common control combination
AccountingAlso called: Business combination under common control
A merger of entities that were already controlled by the same party before and after the transaction — a group reshuffle rather than an acquisition.
In plain terms
Nothing is really acquired in economic terms, so the combined figures are presented as though the businesses had always been one, and prior periods are restated.
Corporate action
Market basicsA company event that changes share count or price — split, bonus, dividend, rights, demerger.
In plain terms
When a chart shows a mysterious overnight halving, check announcements before forming a view.
Scheme of arrangement
Regulation & taxAlso called: Composite scheme
A court- or tribunal-sanctioned corporate reorganisation — a merger, a demerger, a reduction of capital or a composite of these — approved by the required majorities of shareholders and creditors.
In plain terms
The route almost every Indian group restructuring takes. Where a listed company is involved the exchanges and the securities regulator see it first, and the filed documents contain the valuation reports, the swap ratio and the appointed date.
Share swap ratio
Fundamental analysisAlso called: Entitlement ratio
The ratio at which shares of one company are exchanged for another in a merger or demerger.
In plain terms
Tells you how many new shares you receive. The price adjustment on the record date is arithmetic, not a loss.
Special situation
Fundamental analysisA corporate event — demerger, buyback tender, delisting offer, rights issue or index change — that creates a mechanical mispricing independent of business quality.
In plain terms
The terms are published, the timeline is fixed and the outcome is largely arithmetic. They persist because they are boring, small and time-limited, which keeps large funds away.
Structural break
Technical analysisA dated event after which a price series stops describing the same subject — a merger, a demerger of the principal division, a rebuilt capital structure or a change of trading segment.
In plain terms
The chart runs straight through it because the symbol did not change. Every statistic measured across the join is a blend of two companies.
Fundamental attributes
Market basicsThe defined features of a mutual fund scheme — its type, its investment objective and pattern, and its terms of issue — which cannot be changed without written notice to unitholders and a no-load exit option of at least thirty days.
In plain terms
The list is narrower than people assume. A merger or a rewritten objective is on it; the manager leaving is not, however much of your reason for buying they were.