Companies Act 2014 section 1129

Mergers to which Chapter applies — definitions and supplementary provision

Section 1129 defines the three types of merger covered by this Chapter — merger by acquisition, merger by absorption, and merger by formation of a new company — and sets out supplementary rules on how companies being wound up may participate in such mergers.

• A merger by acquisition occurs when a successor company acquires all assets and liabilities of one or more companies that are dissolved without liquidation, in exchange for shares (with or without cash) issued to the members of those companies.
• A merger by absorption occurs when one or more companies transfer all assets and liabilities to a parent company that already holds all their shares (whether directly or through nominees), and the transferring companies are dissolved without liquidation.
• A merger by formation of a new company occurs when two or more companies transfer all their assets and liabilities to a newly formed company, are dissolved without liquidation, and their members receive shares in the new company (with or without cash).
• A company already being wound up may still participate in any of these mergers provided distribution of its assets to shareholders has not yet begun at the date of the common draft terms of merger; alternatively, it may instead use the schemes of arrangement or acquisition provisions in Part 9 or allow its liquidator to accept shares under section 601.