If a company buys another company, does the bought company become a subsidary company of the other company?

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  • Don G
    Lv 7
    1 month ago
    Favorite Answer

    If the bought company continues as a separate company, then it is a Subsidiary. But if the bought company's assets and liabilities are combined with the parent, and its Equity accounts are closed, then it no longer exists.

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  • A.J.
    Lv 7
    1 month ago

    There are many possibilities in mergers and acquisitions. It can be held as a subsidiary as one option. Some companies in China were doing reverse mergers buying listed shell companies on US Exchanges and making that company the primary one, doing a secondary offering. If you ask about all of the possible options, it could be a  big list.

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  • 1 month ago

    They can be structured however the purchasing company wants. Sometimes they are a subsidiary if the 2 companies do completely different stuff. If the companies were direct competitors then the purchased company might be rolled into the new company. 

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  • Pearl
    Lv 7
    1 month ago

    some of them might become that

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  • Rick
    Lv 7
    1 month ago

    Can, or the owner may just absorb it ................

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