Two small firms merge to produce a drink (5)
I believe the answer is:
cocoa
'drink' is the definition.
(cocoa is a kind of drink)
I cannot understand how the rest of the clue works.
Can you help me to learn more?
(Other definitions for cocoa that I've seen before include "Medium to dark brown" , "Chocolaty drink" , "Hot bedtime drink" , "Powder from cacao beans" , "Warming bedtime drink" .)