What is indicated by the term 'merger'?

The term 'merger' specifically refers to the process in which two businesses combine to form a single entity. This process typically involves a mutual agreement where both companies collaborate to enhance their business operations, share resources, and create synergies to improve overall performance. A key feature of a merger is that it usually involves companies of similar size and stature, which helps to integrate their strengths effectively.

In contrast, while combining businesses in different markets can occur, it does not accurately describe a merger, as mergers often involve companies that may operate in similar markets or industries. Horizontal consolidation refers to the merging of companies at the same level of the supply chain, which is a more specific kind of merger, whereas acquisitions involve one company taking over another, rather than merging as equals. Thus, the essence of the term 'merger' is best captured by the concept of joining together as one entity.