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What is a Merger?


A merger occurs when two or more companies decide join together to make a new company. Both companies will be of similar size so that one does not dominate the other when combined. Existing stockholders of both companies involved retain a shared interest in the newly formed company. This is a mandatory corporate action, which means once approved, event will take place regardless of your participation. The amount of shares you will receive in the new company usually reflect the value of the new company, compared to that of the two old companies. A merger will often initially cause the new companys share price to rise.

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