Mergers and acquisitions both involve the combination of existing companies into a new larger entity. In the case of a merger, both organizations negotiate around the terms and conditions of the merger and seek shareholder support. Mergers therefore tend to be more amicable. In an acquisition one company buys another company. In some cases, there may be no negotiation or prior approval. A company might therefore consider a merger where it needs to acquire new or complementary skills or resources but does not necessarily want to buy another company. One obvious reason for this might be the cost of the target company. The nature of the merger could take several forms. In most cases of a merger of equals, both companies must be prepared to make significant organizational changes and variations in working practices. If a company is not prepared to do this, a simple acquisition might be a more favourable option.