Legal analysis: the original debt of the company is inherited by the merged company, but an agreement can be reached with creditors before the acquisition to reduce the debt amount. If the original company has gone bankrupt, this agreement is beneficial to both parties.
Legal basis: Article 174th of the Company Law of People's Republic of China (PRC). When a company is merged, the creditor's rights and debts of the merging parties shall be inherited by the surviving company or the newly established company after the merger.