The process of two or more companies combining. In one model, one company retains its name and often most of its top management. This company acquires all the assets and liabilities of the firm being acquired, which ceases to exist after the merger is completed. Another type of a merger is a consolidation, in which a completely new firm is created and both the other two firms cease to exist. Often, mergers are classified into three types: vertical, horizontal, or conglomerate.

A vertical merger involves combining a company with its supplier or customer.

A horizontal merger combines two companies that are direct competitors making the same products.

A conglomerate merger involves two companies that are not in related industries or businesses.