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A / An is the process where two or more companies agree to come together and form a new company ; a / an is the process by which a financially strong company takes over a less financially strong company by buying more than 50% of its shares , so the decision is not mutual and there's a lot of hostility .

Companies that are usually consider each other of equal stature , and hence they help each other out to create a synergy . In the case of a / an , the company that imposes its will on the company removing its freedom and decision - making .

The purpose of a merger is to reduce competition when one company buys one that sells a similar product or service ; a merger takes place when a company acquires another one that belongs to its supply chain with the intention of increasing efficiency and profits .

If there are 2 companies that want to offer their similar products or services in other countries , they can agree on a merger ; this way they increase their number of clients and may take advantage of additional resources , capacity and distribution channels .

If there are 2 companies that want to offer different but related products or services in a specific market , they could be interested in a merger ; they will be able to share expertise and technology gaining more customers in that market .

A merger typically occurs between firms within different industries or firms located in different geographical locations , so their businesses are not related .

A / an is a cooperative arrangement between two or more business entities , often for the purpose of starting a new business activity . However , it is different from a / an because the business entities continue working independently .