ARTICLE · 01 NOVEMBER 1995
Mergers and Acquisitions in Sweden
Price Waterhouse Skattejurister AB
A merger in the Swedish legal context is a reorganization whereby one company or several companies are dissolved and cease to exist as legal entities while at the same time another surviving legal entity, or a new company formed for the purpose of the merger, acquires all the assets and liabilities and assumes responsibility for any commitments made by the dissolved companies.
From a tax standpoint, a merger is deemed to be a transfer of assets and liabilities followed by a liquidation of the company that ceases to exist. In principle, income tax on the distribution of assets could result. However, in the case of a merger of a wholly owned subsidiary into a parent company, no income tax would normally have to be paid because of specific exemptions in the tax legislation.
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