A business merger involves two or more companies coming together to form a new company. This allows the combined businesses to gain access to more resources and customers, while reducing overhead costs. However, the process is complex and can take up significant energy, time, and funds. It is also not without risk, and can lead to the loss of jobs.

In a business merger of equals, the companies involved in the deal are valued at an equivalent ratio, meaning that each company receives the same share of the new company. This method of valuation can be difficult to accomplish, as both companies must hire professionals to look at their income statements, balance sheets, and cash flow. They must also assess the intellectual property, supply chains, and any pending litigation or regulatory concerns. They must also determine how well their management styles and corporate culture align.

A common motive for a business merger is increased market share. By combining the companies, they can achieve a larger customer base, which means higher revenue and profits. However, this can be bad for consumers, as it can result in higher prices for products or services.

Other reasons for a business merger are to avoid bankruptcy or to save jobs. Often, struggling companies are merged with their more successful competitors to keep them afloat. This can also result in layoffs as the company focuses on cost reduction and other strategic objectives. In other cases, a merger is a last resort before business closure.