I am curious about the difference between a split merger and a general merger.

First, a split merger is a corporate restructuring method that separates only specific business divisions from various businesses operated by one company and merges the separated business into another existing company.

In this case, the existing company continues to exist while only some businesses are transferred, and the receiving company absorbs the relevant business.

Unlike simple 'division' that divides a company or 'merger' that combines a company entirely, the characteristic is that it is a combined form of the two systems.

Such split mergers are mainly used to organize non-core businesses or to strengthen the expertise of specific businesses.

Since the entire company is not merged, management risks can be diversified and the business structure can be more flexibly restructured, which is an advantage.

However, special resolutions of the shareholders' meeting are required and creditor protection procedures must be followed, so the legal and accounting procedures are quite complex.

On the other hand, a general merger has a structure where companies are entirely combined.

In the case of an absorption merger, one company entirely absorbs another company and continues to exist, and in the case of a new merger, all merging companies are dissolved while a new company is established.

There is a fundamental difference from split mergers where only some businesses are transferred, in that all assets, debts, rights, and obligations are transferred.

If you are curious about merger strategies suitable for your company, please confirm through consultation with a corporate M&A attorney.