Which of the following is true regarding mergers?

Mergers typically require shared management because, in a merger, two companies combine to form a new entity or one company adopts the assets and liabilities of another. This process often necessitates collaboration between the existing management teams of both companies to ensure a smooth transition and integration of resources, cultures, and operational strategies. Shared management helps in aligning objectives and leveraging the strengths of both organizations to achieve synergies.

The nature of a merger means that both companies must come together and share responsibilities, making it essential for their leadership to work cooperatively. This shared management structure aids in decision-making processes and helps to harmonize the operational aspects of the newly formed entity.