what is amalgamation

Amalgamation refers to the process of combining two or more companies into a new entity. It is different from a merger because neither of the two companies involved survives as an entity. Instead, the assets and liabilities of both entities are combined into one, leading to an entity with a stronger customer base and more assets. Amalgamation typically happens between two or more companies engaged in the same line of business or those that share some similarity in operations. Companies may combine to diversify their activities or to expand their range of services. The process of amalgamation eliminates competition as two or more major entities join hands and start operating as entirely new firms. The similar nature makes the combining entities share common goals and objectives, which keep them working smoothly and efficiently.