What does consolidation refer to in a corporate context?

In a corporate context, consolidation refers to a process where companies merge to form a new entity. This is typically a strategic move for two or more companies to combine their resources, improve efficiencies, expand market reach, or achieve other business objectives. When consolidation occurs, the individual companies cease to exist as separate entities and instead, a new company is created that encompasses the assets, liabilities, and operations of the merging entities. This can lead to the elimination of redundancies, increased market share, and improved competitiveness.

The other options describe different corporate actions or strategies but do not accurately represent the concept of consolidation. For instance, reducing operational costs can be a goal of many corporate strategies, and filing for bankruptcy is a legal process that companies undergo when they cannot meet their financial obligations. Redistributing power among shareholders pertains to changes in governance or control rather than the merger process itself.