Mergers and acquisitions (M&A) combine two business entities into one. A merger occurs when the two businesses form a new, third entity. In an acquisition, one company purchases and absorbs the other into its operations.
For example, a regional trucking company acquires a smaller logistics competitor in an M&A transaction for $3.5 million, gaining its fleet of 12 trucks, customer contracts, and a new terminal in a strategic location — immediately expanding capacity and eliminating a competitor.
Why it matters: They provide instant growth, market share, and talent, but carry severe risks of cultural clash and overpayment.
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