Absorption

a form of merger of companies that assumes that the acquiring company remains a legal entity, and the absorbed company is liquidated, while transferring all its property, obligations, and debts to the first. The acquiring company, as a result of such a transaction, increases its assets by the amount of the net assets of the acquiring company, and its shareholders are given the right to purchase new shares in proportion to the equity participation of each. As a rule, P. occurs forcibly.