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In a consolidation, the correct outcome is that a new entity is formed, and neither of the merging entities survives as independent organizations. This means the two or more companies involved in the merger combine their assets, liabilities, and operations into a completely new entity.

This process emphasizes the idea that the original companies cease to exist in their prior forms, leading to the creation of a unified company that takes on the consolidated business operations. This is distinct from a merger, where often one entity may continue to exist while the other dissolves, or both may continue to exist as separate entities in the case of a merger without consolidation.

In terms of business structure, the newly formed entity typically adopts a new name, and the governance and operational strategies are redefined and integrated from the original companies. This approach is commonly pursued to leverage synergies, enhance market power, or achieve growth objectives that the individual companies might not have been able to reach independently.