A merger is when two companies combine to form a single company. One company typically absorbs the other, or they create an entirely new company together. Mergers can be friendly, where both companies agree, or hostile, where one company acquires another against its wishes. Shareholders in both companies usually vote to approve the merger.
Bank A and Bank B announce plans to merge. Shareholders of both banks vote to approve the deal. After the merger closes, the two banks operate as one combined entity under a single name and leadership. Shareholders of Bank B receive a set number of Bank A shares for each Bank B share they owned, based on the merger agreement.
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