In a business combination where Equitable-PCI Bank's net assets are absorbed by BDO Unibank, what type of combination is present?

• A. Merger
• B. Consolidation
• C. Dissolution
• D. Spin-off

Answer: (A)

This question tests understanding of how different business combinations work when one company takes over another. In a merger, one company absorbs the assets and liabilities of another and continues to operate as the surviving entity, while the absorbed company ceases to exist as a separate entity. That exactly describes the scenario: BDO Unibank continues, Equitable-PCI Bank’s net assets are incorporated into BDO Unibank, and Equitable-PCI Bank ceases to exist on its own.

By contrast, a consolidation would create a new entity and both original companies would cease to exist; a dissolution ends a company without a surviving entity; and a spin-off creates a new independent company from a portion of an existing one while the original remains.