Asked by Charlesiana Roberts on Jul 19, 2024
Verified
If a firm is afraid of being prevented from using a certain supplier due to a proposed merger, what type of merger is the proposed merger likely to be?
A) A consolidation
B) A horizontal merger
C) A conglomerate merger
D) A vertical merger
Horizontal Merger
A business consolidation that occurs between firms who operate in the same industry, often aimed at creating a more competitive entity with higher market share.
Conglomerate Merger
A merger between companies that operate in entirely different industries.
Supplier
An entity that provides goods or services to another organization involved in a supply chain.
- Gain insight into the logic underpinning mergers, acquisitions, and antitrust regulations.
Verified Answer
JT
JADIAMOND THOMASJul 21, 2024
Final Answer :
D
Explanation :
A vertical merger is a merger between firms that operate at different stages of the production process for a specific product or service. If a firm is concerned that a proposed merger will prevent them from using a certain supplier, it is likely that the merger involves firms that are vertically integrated with each other and may lead to the supplier being acquired by the merged entity.
Learning Objectives
- Gain insight into the logic underpinning mergers, acquisitions, and antitrust regulations.