In terms of investment, what does the term 'merger' generally refer to?

The term 'merger' in the context of investment refers to the combination of two companies to form a single entity. This process typically involves one company acquiring another, resulting in the integration of resources, operations, and management.

When companies merge, they often aim to achieve strategic advantages such as increased market share, improved synergies, cost savings, or enhanced competitive positioning. This can lead to a more robust entity that is better positioned to respond to market demands and drive profitability.

In contrast, the other concepts mentioned involve different kinds of transactions or scenarios. The sale of company assets refers to divesting parts of a business rather than merging them. An initial public offering (IPO) is the process by which a company sells its shares to the public for the first time, which is unrelated to merging with another entity. A government takeover, often called nationalization, pertains to a government acquiring control over a private company, which fundamentally differs from the private-sector activity of merging companies.