The head office absorbed the merged subsidiaries.

Legal analysis: the parent company's absorption and merger of wholly-owned subsidiaries belongs to "business combination without paying consideration under the same control", which meets the special reorganization conditions. The parent company's absorption and merger of wholly-owned subsidiaries conforms to the principles of reasonable business purpose, continuity of rights and interests and continuity of operation stipulated in the document.

Legal basis: Branch companies can be established in Article 14 of People's Republic of China (PRC) Company Law. The establishment of a branch company shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company. A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.