What is the difference between a merger and a corporate alliance?

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What is the difference between a merger and a corporate alliance?

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What is the difference between a merger and a corporate alliance?

Explanation & AnswerSolution by a verified expert

Explanation

Corporate alliances are essentially agreements between companies to do business together in some form. They can take the form of marketing agreements, sales agreements, joint projects, or manufacturing agreements. They are usually temporary, arranged by management, and executed by contract. Assets are not exchanged and the shareholders of the companies are not involved.

Verified Answer

A corporate alliance differs from a merger in that alliances do not involve changes in ownership of assets and therefore do not have to be approved by shareholders.

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