AMALGAMATION

Presented by
Kankesh Gadge
Yogesh
Patil
Nitin
Gholap
 What is Amalgamation?

To come together as one

Amalgamation

One or more business entities and transfer of business of

dissolved entities to another entity
According AS-14 Amalgamations

Amalgamation means an amalgamation is to the

provisions of the Companies Act,1956 or any other
statute which may be applicable to companies.

Transfer company means the company which is

amalgamated into another company

Transferee company means the company into which a

transferor company is amalgamated
Definition of Amalgamation
In general, the definition of amalgamation can be stated as
follows.

Amalgamation is a two or more companies, made with as an to

a
new company.

In terms of finance, the definition of amalgamation can be given

as under.

Amalgamation is an agreement (deal) between two or more

companies to consolidate (strength) their business activities by
establishing a new company having a separate legal existence
 Why Amalgamation?

Large Scale
Operations

To acquire
cash Increase Eliminate
resources Shareholders Competition
Value

Tax Savings
Method of Amalgamation

1) Amalgamation in the Nature of Merger

2) Amalgamation in the Nature of Purchase

Nature of Merger

All the assets and liabilities of the transferor company become

after the amalgamation the asset sand liabilities of the transfer
company .

Shareholders not holding less than 90% of the face value of the
equity shares of the transferor company

For the purpose of computing 90% exclude the Shares already

held prior to amalgamation by:
One or more subsidiaries of the transferee company In the
transferor company

Nominees of the transferee company in the transferor company.

Nature of Purchase

The transferee company accounts for amalgamation

By incorporation the assets and liabilities at their existing carrying

amount
Or
By allocation the consideration to individual identifying assets and
the liabilities of the transferor company on the Basis of theirs fair
value the time of amalgamation
Two good examples of amalgamations are as
follows:

1.Maruti Motors operating in India and Suzuki based in

Japan amalgamated to form a new company called
Maruti Suzuki (India) Limited.

2.Tata Sons operating in India and AIA Group based in

Hong Kong amalgamated to form a new company
called TATA AIG Life Insurance.