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Corporate mergers are becoming increasingly commonplace in the 21st-century. In order to properly discuss the recurrence
of mergers in businesses today we must understand the definition of a merger, present a history of company mergers, determine why businesses find it beneficial to merge and identify what are the potential consequences involved with a merger. As one merger follows another, the benefit for owners and investors becomes very obvious. From this information this paper will show that for our society as a whole, the consequences of mergers seem far less beneficial.
The term merger is loosely used to indicate any combination of two companies or businesses. A more detailed definition would be that a merger allows "the assets and liabilities of the selling company to be transferred to and absorbed by the buying corporation." Today mergers have become a significant part of the corporate strategy. The combination of companies can be classified into one of three categories. A horizontal merger, this occurs between two organizations competing against each other in the same product or service range, for example financial institutions. A vertical merger, this occurs between two firms in different stages of production or distribution of a particular good, for example the oil industry. A conglomerate merger, this occurs between two companies whose activities are not related.
During the final years of the 19th-century, the United States witnessed a rash of corporate mergers. The Industrial Revolution had taken firm hold, and the nation was changing rapidly. Millions of Americans who had once been independent farmers or tradesmen n ...