Describe what a merger is in the context of investment banking.

In investment banking, a merger refers specifically to the combination of two companies into one entity. This process typically involves a collaborative agreement where both companies' management teams work together to create a new, unified organization that benefits from the strengths and resources of each. Mergers are often pursued to achieve various strategic goals, such as increasing market share, enhancing operational efficiencies, or expanding product offerings.

When two firms merge, they may share key resources, technologies, and talents, which can lead to greater innovation and competitiveness in the marketplace. The resulting organization usually creates a more substantial presence and leverage within the industry, often leading to improved financial performance and enhanced shareholder value over time.

This definition clarifies that a merger is not just an acquisition or a simple partnership; it signifies a deeper level of integration and alignment between the two companies involved, ultimately aiming to form a single, stronger entity.