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ummary: Mergers and acquisitions involve two companies joining forces to form a new entity. This can lead to employee layoffs, division redundancies, or business asset restructuring. Mergers are usually beneficial for the resulting company. A merger happens when two companies see mutual benefits and merge under a new or similar name. In an acquisition, a larger company buys a smaller one. In a merger, both companies become a new entity and their stocks merge into the new company.