What is a merger?

A merger is defined as the process where two or more companies come together to form a single entity. This typically occurs when businesses believe that joining forces will create efficiencies, increase market share, or enhance competitiveness. Mergers can take various forms, such as horizontal mergers, which involve companies in the same industry at the same stage of production, or vertical mergers, where companies in different stages of production within the same industry unite.

The importance of this concept lies in how it can reshape the marketplace, benefiting consumers through improved services and competitive pricing, while also allowing companies to share resources and expertise. Understanding mergers is crucial for grasping larger business strategies and the dynamics of market competition.