Which term describes the combination of two or more companies into a single firm?

Which term describes the combination of two or more companies into a single firm?

• A. Joint Venture
• B. Acquisition
• C. Strategic Alliance
• D. Merger

Answer: (D)

Mergers occur when two or more firms combine to form a single company, joining forces to create one new entity with shared ownership and management. This stands in contrast to an acquisition, where one company buys another and absorbs it, often keeping the acquired firm as part of the larger one or dissolving its separate identity. A joint venture, by contrast, creates a new, independent business owned by two or more firms, while each original company remains separate. A strategic alliance is a looser partnership where firms cooperate on projects but don’t merge into one firm. Kraft and Heinz’s combination is a classic example of a merger, forming Kraft Heinz as a single firm.

Mergers occur when two or more firms combine to form a single company, joining forces to create one new entity with shared ownership and management. This stands in contrast to an acquisition, where one company buys another and absorbs it, often keeping the acquired firm as part of the larger one or dissolving its separate identity. A joint venture, by contrast, creates a new, independent business owned by two or more firms, while each original company remains separate. A strategic alliance is a looser partnership where firms cooperate on projects but don’t merge into one firm. Kraft and Heinz’s combination is a classic example of a merger, forming Kraft Heinz as a single firm.