Merger and acquisition

A merger in the world of finance is similar to a merger of, well, anything: that is, to merge is to join together.

And in a merger, two companies (and sometimes even more) will join together, meaning that their assets get pooled, and the idea is that there will be economies of scale and streamlining possible through having two companies merging that compliment each other, either offering the same services or very similar (being in the same industry).

This is called an acquisition rather than a takeover if the one party takes over the other one and they become a single body; in this case there may be competition laws that stop an acquisition if it would lead to too dominant a player in the industry.

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