When a new combined government replaces the separate governments of a city and a county,...

A government merger occurs when two or more legally separate governments are combined to form a new government, and the original governments cease to exist. This includes combinations like a city and county merging to form a unified government, with combined assets, liabilities, and operations.

There is no acquiring government — rather, the governments voluntarily combine into a new legal entity.

Relevant References:

GASB Statement No. 69 – Government Combinations and Disposals of Government Operations

GASB Codification Section G60 – Definitions of Mergers vs. Acquisitions

GFOA Government Restructuring Guidelines

Answer: A. a government merger