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Mergers combine two separate businesses into a single new legal entity. True mergers are uncommon because it's rare for two equal companies to mutually benefit from combining resources and staff, including their CEOs.
Mergers and acquisitions (M&As) are the acts of consolidating companies or assets, with an eye toward stimulating growth, gaining competitive advantages, increasing market share, or influencing supply chains.
A merger, or acquisition, is when two companies combine to form one to take advantage of synergies. A merger typically occurs when one company purchases another company by buying a certain amount of its stock in exchange for its own stock.
In a merger, the stockholders of the acquired corporation typically receive cash, stock of the surviving corporation or some combination of stock and cash.