Many confusing terms in legal Spanish and English are simply legal synonyms that are not always clearly distinguishable, often making it necessary to learn how each one is used in a specific context or in “set” phrases (frases hechas). Some may be interchangeable; others are limited to use in specific contexts. Those highlighted in this blog are ones that I have seen confused in translation or that my students and lawyer clients have found most difficult to distinguish.
fusión por absorción; fusión por creación
merger; consolidation; concentration
In English the term “merger” is often used informally and generically to refer to any type of amalgamation of business entities (fusión de sociedades). But in its strictest sense merger more properly denotes “the absorption of one organization (that ceases to exist) into another that retains its own name and acquires the assets and liabilities of the former.* In Spain and other Spanish-speaking jurisdictions this is known as fusión por absorción, and the surviving company is referred to as the sociedad absorbente, while the merged (or) absorbed company that ceases to exist is known as the sociedad absorbida.
In contrast, in what is properly called a “consolidation” there is a “unification of two or more corporations or other organizations by dissolving the existing ones and creating a single new corporation or organization.”* In Spanish this is known as fusión por creación de sociedad nueva. Thus, although fusión and “merger” are often used generically to denote both concepts, fusión por absorción is “merger,” while fusión por creación (de sociedad nueva) is more properly “consolidation.”
In other respects, especially in EU competition law, mergers are typically referred to as “concentrations” (concentraciones), and “merger control” is rendered as control de concentraciones or control de operaciones de concentración.
fusión de sociedades—merger (generic)
fusión por absorción—merger
sociedad absorbente—surviving entity (company, corporation, etc.)
sociedad absorbida—merged entity (company, corporation, etc.)
fusion por creación (de sociedad nueva)—consolidation
control de concentraciones; control de operaciones de concentración–merger control
*Black’s Law Dictionary, 8th ed.