Definition
- Merger
- A merger is when two formerly separate firms combine to become a single firm, operating from then on under common ownership.
- Not to be confused with: Acquisition
- An acquisition is when one firm purchases another, which may carry on operating under its former company name.
Test yourself
What is the difference between merger and acquisition?
Both put two firms under common ownership: a merger combines them into one new firm, an acquisition has one firm buy the other.