Updated: 2006-10-18 14:56

When one company purchases another company of an approximately similar size, the two companies come together to become one.

Two companies usually agree to merge when they feel that they can do something together that they can't do on their own.

For example, AOL and Time Warner merged a few years back in hopes that they could both gain something. AOL wanted access to Time Warner's cable network. Time Warner wanted access to AOL's users (to promote movies and other Time Warner products) as well as AOL's extensive internet content.

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