Amalgamation, Merger & Demerger

Amalgamation 

In the Indian context, both merger and amalgamation are treated as one as per section 2 (1A) of the Income tax Act,1961. Amalgamation is seen as merger of one or more companies with another company or it can be a merger of two or more companies to form a new company. It is done in a way that in totality all the assets, liabilities and shareholder's holding of new. 

Merger

Merger is a happy bending of two or more organizations. A merger is the end result of two companies combining into one company. 

Demerger 

Demerger is a technique of corporate restructuring in which an independent company is created from a parent company 

Example: Rolls-Royce motors was created from the demerger of the Rolls-Royce car business from Rolls-Royce Limited in 1973. The main objective behind a demerger is to provide for a clear, precise and un-distracted focus on core business for the parent company.