Mergers and acquisitions (M&A) is the area of corporate finances, management and strategy dealing with purchasing and/or joining with other companies. As the companies involved are typically of similar size and stature, the term “merger of equals” is sometimes used. However, this encompasses a wide range of possibilities; the “merged company” may be formed by combining companies having only minority interests in one another (achieving simply a business extension or division), or it may be a “merger of acquisition,” in which the companies’ governing bodies are subsumed into a new parent entity. In practice, many mergers are a combination of both these techniques. Such transactions are often mutually rewarding to both sides.
The main reason to do a merger or acquisition (M&A) is to get access to a company’s market, technology, distribution channels or brand. A merger is an agreement between two or more companies, often competitors or business rivals, to join forces in order to enhance their collective marketplace presence and profitability.