Merger by absorption of a wholly-owned subsidiary meaning

In practice, this describes a group reorganisation in which a parent company absorbs its 100% subsidiary, taking over all the subsidiary’s assets and liabilities by universal succession and the subsidiary is dissolved without liquidation; no new shares are issued because the parent already owns the entire equity. The expression originates as a defined category of statutory merger under the Companies (Cross-Border Mergers) Regulations 2007 (UK), now revoked, and under EEA cross‑border merger legislation. It remains a legislative concept in Ireland (and, for EEA companies, under EU cross‑border merger rules), and is also used descriptively by practitioners. Key features: - Transferor company is a wholly‑owned subsidiary; transferee is its parent. - Automatic transfer of all assets, liabilities and contracts to the parent (universal succession). - No share exchange or consideration to minority shareholders. - The subsidiary is dissolved without winding up. - Subject to prescribed procedural steps, creditor protections and, where applicable, court or registrar approval. Jurisdictional note: - England and Wales, Scotland and Northern Ireland: the UK cross‑border merger regime has been revoked; similar outcomes are now achieved via schemes of arrangement, business/asset transfers or solvent liquidation routes. - Ireland: statutory domestic and EEA cross‑border mergers (including absorption of a wholly‑owned subsidiary) remain available under Irish company law.