A commonly-known company merger is the 1998 merger of Chrysler Corporation and Daimler Benz to form DaimlerChrysler. An example of a company takeover is the acquisition of Pixar Animation Studios by Walt Disney Corporation in 2006.
A company that decides to combine with another company usually wants to achieve economies of scale, diversify its operations, increase its market share and raise its sales revenues. A merger and a takeover are similar because they both result in two separate companies becoming a single corporation. A merger is different from a takeover as it is typically a decision between two companies that agree "as equals" to combine into one company. On the other hand, a takeover usually involves a larger company purchasing a smaller company; the larger company usually finances the acquisition and takes full control of the smaller company. A larger company can engineer a hostile takeover in case the management of the smaller company resists the acquisition.
The smaller company can protect itself from a hostile takeover by staggering the terms of directors to limit the number of available positions each year. The firm may also pass an amendment that requires a high number of shares to approve a merger. This sets a high target for any firm that wants to acquire the company.