In a bank merger where the acquiring bank absorbs all the net assets of the other bank, which statement best describes the outcome?

• A. The acquiring bank remains as a separate entity
• B. The banks operate wholly independently
• C. The acquired bank continues as before
• D. The acquiring bank absorbs all the net assets of the other bank

Answer: (D)

In an acquisition, the winning bank takes control of the other bank’s assets and liabilities and continues to exist as the surviving entity. The phrase “absorbs all the net assets” means the acquiring bank gains the other bank’s assets and assumes its liabilities, consolidating them into its own balance sheet. As a result, the acquired bank no longer operates as a separate, independent entity; it ceases to exist on its own, and a single merged entity remains under the acquiring bank. This is why the description that best fits the outcome is that the acquiring bank absorbs all the net assets of the other bank.