A business merger is a major undertaking that brings two separate legal entities together into one combined entity. It’s an important tool for companies seeking to reach economies of scale, expand into new markets or unify common products and services. Mergers are often associated with layoffs and other workplace changes that can affect performance, morale and culture.
While many businesses rely on a partnership structure, there are other structures including sole proprietorships, limited liability companies and corporations. A person who creates and runs a business is called an entrepreneur, and they can range in size from an individual running a lemonade stand to large multinational enterprises that employ thousands of workers worldwide.
When considering a business merger, it’s critical to understand what is a business and how it differs from an acquisition. The most fundamental difference is that an acquisition combines the assets and liabilities of a company into a new legal entity, whereas a business merger is when two companies join to form one single entity.
Businesses that are considering a merger should have access to all relevant data throughout the process so they can guarantee that projected benefits and costs are grounded in reality. This is especially true during the integration phase when the companies are bringing their processes and cultures into alignment. It is also an ideal time to review and, if necessary, recalibrate original plans and goals.