The concept of demerger is also introduced. Various Indian laws and statutes having a bearing on merge process have been outlined and trends traced. Few other related procedural issues are also covered. The decision to invest in a new asset would mean internal expansion for the firm. The new asset would generate returns raising the value of the corporation. Mergers offer an additional means of expansion, which is eternal, i.e. the productive operation is not within the corporation itself. For firms with limited investment opportunities, mergers can provide new areas for expansion. In addition to his benefit. The combination of two or more firms can offer several other advantages to each of the corporations such as operating economies, risk reduction and tax advantage.
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