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When companies decide to merge or join forces, it typically means they see mutual benefits in forming a united entity. Mergers can lead to employee layoffs, division redundancies, or restructuring of assets. While these events can bring uncertainty, they often result in advantages for the newly formed company. In cases where one company is significantly larger, it usually results in an acquisition, where the larger company purchases the smaller one. During a merger, the stocks of both companies combine into a new entity, representing the newly created organization.