What happens in an operating merger?

In an operating merger, the primary focus is on the integration of the firms' operations to achieve synergies. This type of merger is driven by the belief that the combined entity can operate more efficiently than the separate firms could on their own. By merging operations, companies aim to optimize resources, reduce redundant functions, enhance competitive advantages, and ultimately create greater value for shareholders.

The goal is to leverage the strengths of both companies, whether through shared technology, expanded distribution networks, or combined product lines, to improve overall performance. Synergies can lead to cost savings, increased revenues, and improved market position, making operational integration a significant factor in the success of the merger.

The other choices reflect alternative scenarios that do not align with the concept of an operating merger. For instance, options indicating no integration or focusing solely on financial performance without operational synergy overlook the critical aspect of integrating operations for improved efficiency and effectiveness in producing goods or services.