What characterizes a merger?

• A. Two businesses agree to join forces and become one organisation
• B. One firm buys another and splits it into parts
• C. A formal partnership with shared ownership but separate branding
• D. A franchise arrangement with a parent company

Answer: (A)

A merger is when two companies combine to form a single, new organization. It’s about two separate businesses agreeing to join forces and operate as one entity, often sharing resources, leadership, and branding under a new corporate structure. This distinguishes it from where one firm buys another and the acquired company is kept intact or split up (an acquisition), or from forming a partnership where two firms remain separate brands but share ownership, or from franchising, which involves a parent company licensing its business model to others. So the description of two businesses agreeing to join forces and become one organisation best captures what a merger is.