Definition: is the affiliation of the subsidiary company to the principal. Upstream merger is a transaction that takes place in order to establish control over an economic company. Such a transaction is carried out through the acquisition of at least 30% of the charter capital of the company being absorbed. At the same time, legal independence remains. Upstream merger is one of the market mechanisms for dealing with laggards in the market. For example, a certain joint-stock company reduces the pace of its development, is rapidly lagging behind some market requirements, in this case, naturally, the prices of its shares relative to the prices of other joint-stock companies are reduced. And as a result, it becomes attractive for upstream merger.
Upstream merger in a sentence:
- The upstream merger is an association of companies on a parity basis.
- A fairly common variant of the upstream merger is the construction of a vertically integrated company, i.e. the supplier unites with the consumer.
Synonyms and related words: merger, spin-off, reorganization