Decoding govt's move to amalgamate Bank of Baroda, Dena Bank, Vijaya Bank

The recent announcement by the government to go in for an amalgamation of three public sector banks raises several legal/regulatory issues. Sudipto Dey explains the key implications

What are the key differences between a merger and an amalgamation?

Often, the terms ‘merger’ and ‘amalgamation’ are used interchangeably.

However, experts point out that a merger refers to a corporate restructuring activity of two or more companies into a single company, whereby the identity of some of the companies gets dissolved. Amalgamation, on the other hand, is a wider concept than ‘merger’, they add.

Under the Companies Act, 2013, there are two kinds of mergers — ‘merger by absorption’ and ‘merger by formation of a new company’, points out company secretary Gaurav Pingle. In the case of ‘merger by