Definition: Combination of two or more companies into one with a single identity, typically that of the larger or largest of the companies. 

Example: A merger is the fusion of two entities to form a new entity (A + B = C), while an acquisition is the purchase of one entity by another (A + B = A). 

See Also: Acquisition.
Tips: When two or more companies merge to form a new company, the new company may use the name of one of the former companies, but it is still a new company. A new set of books and records are developed.