Corporate attorney, I am curious about corporate mergers.

A corporate merger is an important legal act in which two or more companies are combined into one, and depending on the legal procedure and structure, it has a significant impact on the existence and management of the companies.

The methods of corporate merger can be largely divided into absorption merger and consolidation merger.

Absorption merger is a method in which one company absorbs another company, and the absorbed company (the disappearing company) legally disappears, leaving only the absorbing company (the surviving company).

In this case, the surviving company comprehensively succeeds to all rights and obligations of the disappearing company, including assets, liabilities, contracts, and lawsuits.

On the other hand, consolidation merger is a method in which two or more companies all disappear and a new company is established, with the newly established corporation succeeding to all rights and obligations.

Consolidation merger has a comprehensive reset effect, so it is also preferred when an equal merger relationship or new business reorganization is desired.

Mergers carry many risks if conducted based solely on management judgment.

For example, various legal issues exist such as opposition from shareholders, objections from creditors, calculation of fair merger ratios, labor issues, and reviews related to monopoly regulation. Overlooking these can lead to lawsuits or risks of transaction invalidation.

Corporate attorneys assist in minimizing legal risks throughout the entire process, including drafting merger contracts, due diligence, conducting merger procedures, consultation with stakeholders, and regulatory response.

In particular, by collaborating with M&A specialist corporate attorneys, you can carry out a stable merger without procedural defects, which is also beneficial for the long-term interests of the company.