What is a merger? Meaning, types, and benefits

Mergers are business combinations between two firms wherein the desired outcome of those combinations is the formation of one firm. A merger is usually for the purpose of increasing the size and market share, value, or profitability of the merged companies (merging firms). Understanding the definition of a merger, and the types of mergers available to firms (horizontal, vertical, and conglomerate) allows businesses to develop ways to position themselves to pursue opportunities to grow and to create competitive advantage.Businesses use mergers to minimise their operational costs, to extend their business into new geographic regions, or to gain access to new technologies. Entrepreneurs, investors, and professionals can learn about the effects of mergers on their ability to survive, grow-and-prosper in today's rapidly changing business environment, and have an increased ability to succeed through business consolidations.