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.
