What is a Statutory Consolidation?

A statutory consolidation is a combination of two companies through a merger transaction, where both entities are replaced by a new entity. The new entity retains the assets, liabilities, and contractual arrangements of the original entities. The original merging entities are terminated at the time of the merger.

Example of a Statutory Consolidation

An example of a statutory consolidation is the merger of Conoco Inc. and Phillips Petroleum Company to form ConocoPhillips in 2002. This transaction was structured as a statutory consolidation, where both Conoco and Phillips ceased to exist as independent legal entities and combined their assets, liabilities, and operations into a new entity, ConocoPhillips. The consolidation was aimed at creating one of the largest integrated oil and gas companies in the world at the time, allowing for enhanced efficiency, greater market reach, and increased shareholder value.