Mergers & Acquisitions

A merger is when two businesses combine to form a single entity. To do this, one business absorbs the other's assets and liabilities under its name, and the second business shuts down. A merger may help a business reduce its costs and grow its market share. This process is typically mutually beneficial. The two businesses that joined as one may choose a new company name that better reflects the new company's mission, or they may choose to maintain one of the companies' names to benefit from brand awareness.

An acquisition is when one business buy's part or all of a second business's stock or assets. The company acquiring the other business usually keeps its business name, legal structure, and operations. As such, the acquired business legally ceases to exist.

While often discussed in the context of large conglomerates or multinational corporations, mergers and acquisitions (M&As) can involve businesses of any size, including small businesses.

A consolidation is when two or more businesses come together to create a new entity that takes on the assets, liabilities, and financial resources of both businesses. Businesses often consolidate to increase profitability and take advantage of cooperation rather than competition.