Two corporations join together into one with one surviving and the other disappearing. What is this called?

• A. Merger
• B. Acquisition
• C. Joint venture
• D. Consolidation

Answer: (A)

When two corporations join to form one entity and one survives while the other disappears, that is a merger. In a merger, two firms combine to operate as a single company; the surviving firm continues while the other is absorbed and ceases to exist as a separate entity. This differs from an acquisition, where one company buys another and the acquired firm is absorbed into the buyer, but the term emphasizes control rather than two firms blending into one. Consolidation creates a brand-new company and both original firms cease to exist, while a joint venture involves a separate business entity created by two or more companies that remains distinct from either parent. The scenario described fits a merger because it results in one surviving entity after combining.