Amalgamation is an agreement whereby two or more companies consolidate their activities to create a new business or become a subsidiary of either company. When stock-based compensation agreements are entered into by the purchaser and replaced, the value of these bonuses must be divided between the pre-combination and pre-combination and pre-combination service and the pre-combination service and take them into account accordingly. [IFRS 3.B56-B62B] The documentation of a transaction often begins with a letter of intent. As a general rule, the Memorandum of Understanding does not commit the parties to engaging in a transaction, but may bind the parties to obligations of confidentiality and exclusivity, so that the transaction can be contemplated through due diligence with lawyers, accountants, tax advisors and other professionals, as well as businessmen from both parties.  Note: Annual improvements to the 2010-12 IFRS cycle changes these requirements for business combinations for which the acquisition date is July 1, 2014 or after that date. Under the amended requirements, potential counterparties classified as assets or liabilities are valued at fair value on each balance sheet closing date and changes in fair value are recorded for potential counterparties within the scope of IFRS 9/IAS 39 as well as by other means. From a legal point of view, a merger is a legal consolidation of two entities to one, while an acquisition occurs when an entity takes ownership of shares, interests or assets of another entity. From a commercial and economic point of view, both types of transactions generally result in the consolidation of assets and liabilities within a company, and the distinction between a “merger” and an “acquisition” is less clear. A legally structured transaction as an acquisition may result in the activity of one party moving to indirect ownership of the other party`s shareholder, while a legally structured transaction as a merger may grant partial ownership to the shareholders of each party and control of the merged entity.
A deal can be characterized as a merger euphemism of equals if the two CEOs agree that a merger is in the best interests of both companies, whereas if the agreement is unfriendly (i.e. if the management of the target company rejects the agreement), it can be considered an “acquisition”.