What is a "merger"?

A merger is defined as the combination of two companies into a single entity, which often occurs to enhance competitive advantage, increase market share, or achieve synergies in operations. When two firms merge, they effectively join forces, pooling their resources, talent, and technology to create a new organization that may be able to operate more effectively than the separate firms could on their own. This process typically involves negotiation between the companies and can result in new branding and corporate structures.

The other options do not encapsulate the concept of a merger accurately. The dissolution of a partnership refers to a scenario where two businesses end their collaborative agreement, which contrasts with the idea of unifying efforts. An acquisition involves one company purchasing another, which differs from a merger as an acquisition usually means that one company retains its identity while the acquired company may cease to exist. Selling a subsidiary refers to divesting a part of a business rather than combining two companies, which is a completely different business action. Thus, the correct choice accurately reflects the essence of a merger.