Companies A and B combine to form Company X and cease to exist as separate entities. This is an example of ____.
A)a merger
B)an acquisition by Company A
C)a consolidation
D)an acquisition by Company B

Question

Quizplus · Accepted Answer

When two or more companies combine to form a new entity and cease to exist as separate entities, it is known as consolidation. Merger involves two companies coming together to form a new company, while acquisition involves one company taking over another company. In this case, neither Company A nor Company B is taking over the other, but both are forming a new entity known as Company X.

Companies a and B Combine to Form Company X and Cease