Rock the PHR Exam 2026 – Unleash Your HR Superpowers!

A merger involves the combining of two firms to create a new entity, often viewed as a collaboration on equal terms, where resources and operations are integrated to benefit both organizations. This is typically seen as a strategic move to leverage strengths, share risks, and enhance market presence.

In contrast, an acquisition occurs when one firm purchases another, leading to a situation where the acquired company becomes part of the acquiring firm and may lose its corporate identity. This process often emphasizes control and ownership, with the acquirer dictating the direction and management of the acquired firm.

The distinction between merging as equals and one company absorbing another is key to understanding the strategic motivations behind each action and the resulting organizational structures. Other answer choices reflect misunderstandings of these processes; they either inaccurately equate the terms or apply misleading conditions that do not universally apply to mergers and acquisitions.