From a legal point of view, a merger is a legal consolidation of two entities to one, while an acquisition occurs when an entity takes ownership of shares, interests or assets of another entity. From a commercial and economic point of view, both types of transactions generally result in the consolidation of assets and liabilities within a company, and the distinction between a “merger” and an “acquisition” is less clear. A legally structured transaction as an acquisition may result in the activity of one party moving to indirect ownership of the other party`s shareholder, while a legally structured transaction as a merger may grant partial ownership to the shareholders of each party and control of the merged entity. A deal can be characterized as a merger euphemism of equals if the two CEOs agree that a merger is in the best interests of both companies, whereas if the agreement is unfriendly (i.e. if the management of the target company rejects the agreement), it can be considered an “acquisition”. The Great Merger Movement was a predominantly American commercial phenomenon, which occurred from 1895 to 1905. During this period, small companies with a small market share consolidated with similar companies to form large, powerful institutions that dominated their markets, such as the Standard Oil Company, which controlled nearly 90% of the global oil industry at its level. It is estimated that more than 1,800 of these companies have disappeared in consolidation operations, many of which have acquired significant shares in the markets in which they were active. The vehicle used was so-called trusts. In 1900, the value of companies acquired through mergers accounted for 20% of GDP.

In 1990, this figure was only 3% and 10-11% of GDP between 1998 and 2000. Companies such as DuPont, U.S. Steel and General Electric, which merged during the major merger movement, were able to maintain their dominance in their respective sectors until 1929 and, in some cases, to this day, due to the increasing technological advances in their products, their patents and the reputation of their brands by their customers. There were also other companies that had the largest market share in 1905, but did not have the competitive advantages of companies such as DuPont and General Electric. In 1929, these companies, such as International Paper and American Chicle, experienced a significant decline in market share due to the merger of smaller competitors and much greater competition. The mergers were mass producers of homogeneous products, which could benefit from the efficiency of mass production. In addition, many of these mergers were capital-intensive. Due to the high fixed costs associated with lower demand, these new companies have been encouraged to maintain production and drive down prices.

But most of the time, mergers were “quick mergers.” These “rapid mergers” included corporate mergers with unrelated technologies and different managements.