A significant amount of time and effort is put into the front side of every deal, including meetings, research, and due diligence. Mergers and acquisitions are the legal processes that take place when two separate companies are combining in some fashion. Mergers occur when two companies combine to create a new third company. Acquisitions occur when one company acquires a second company. The purchased company may be absorbed into the parent organization or run as a subsidiary. The company that is of interest to the other company is often referred to as the “target.”