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3) Circular combination: A circular combination is a business combination of companies that are engaged in different businesses and those producing different products. For example, if a cell phone company bought a car manufacturing company, that would be an example of a circular combination.
Types of Business Combinations Combinations may take several forms, such as horizontal, vertical, lateral, and diagonal, circular, or maybe a mixture of two or more of these types.
A business combination agreement is a legal document for when companies merge that determines who has voting power for specific issue, such as amendments to the company's bylaws and mergers with other companies. Unfortunately, many business owners are unaware of the importance of a business combination agreement.
A business combination is defined as an entity obtaining control of one or more businesses. The most common business combination is a purchase transaction in which the acquirer purchases the net assets or equity interests of a business for some combination of cash or shares.