The purchase of one company by another is called?

The purchase of one company by another is called a "merger". A merger is a financial transaction in which two or more companies combine their operations to form a single entity. In a merger, one company purchases another company's assets and assumes its liabilities in exchange for a payment, which is usually made in the form of cash, stock, or a combination of both. The goal of a merger is to create a stronger, more competitive entity that is better positioned to succeed in the market. Mergers can take various forms, including horizontal mergers, where two companies in the same industry merge, or vertical mergers, where a company acquires another company in the same supply chain. Mergers are a common strategy for companies seeking to grow or diversify their operations.