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ARTICLE · 08 MAY 2001

What To Do: To Merge Or To Split-Off?

ColombiaFinance and Banking
Armando Parra Escobar
Armando Parra Escobar

Means to act in an economic world.

There are several ways to act in an economic world: from simple agreements to operate a market, dividing it by specialities, intermediate options such as consortia, and joint ventures, up to a formal concentration, resulting in a merger. The means to achieve a corporate structure and the desired position of assets may be obtained by various systems, from the simple partial or total transfer of goods, the liquidation or integration under merger or split-off or the combination thereof in simple or multiple and complex processes.

As to mergers, a company is enlarged to absorb other or others, obtaining a juridical unity thereof, with an absolute and irreversible character. Companies become unified and mixed up and one or more companies disappear. By means of a merger, a company known as absorbent absorbs the patrimony, assets and liabilities of one or more absorbed companies, thus consolidating into only one entity. The absorbent company will assume

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