Companies can combine or one can buy another. Mergers and acquisitions, often abbreviated M&A, are those transactions. In a merger two firms of roughly similar standing join to form a new entity. In an acquisition one firm purchases control of another. The motives include growth, synergy, diversification, elimination of a competitor, or access to technology and talent.

Deals range from friendly negotiations to hostile takeovers. Valuation, due diligence, regulatory approval, and integration planning are critical stages. Many acquisitions fail to deliver the expected value because of cultural clashes, overpayment, or poor post-deal integration. Successful ones create more value than the sum of the separate parts.

M&A activity is cyclical and sensitive to financing conditions, stock-market levels, and industry consolidation trends. Advisors, lawyers, and investment bankers play large roles. For the companies involved, a major deal can reshape strategy, culture, and competitive position for years.