Asked by Haydee Morales on Jun 01, 2024
Verified
Suppose General Motors buys up auto dealerships in all the major cities in Canada. This is an example of a _________________ acquisition.
A) Horizontal.
B) Vertical.
C) Conglomerate.
D) Tender offer.
E) Pooling of interests.
Vertical Acquisition
The acquisition of a company operating within the same industry but at a different level of the supply chain, enhancing supply chain efficiency.
Horizontal Acquisition
The process of a company acquiring another company in the same industry at the same level of the supply chain to enhance its market share.
Conglomerate Acquisition
A conglomerate acquisition occurs when a company buys another company in a completely unrelated business sector, aiming for diversification of business interests.
- Recognize and distinguish between different forms of acquisitions (for instance, horizontal, vertical, and conglomerate).
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
B
Explanation :
This is an example of a vertical acquisition because General Motors, an automobile manufacturer, is acquiring auto dealerships, which are part of its supply chain but operate at a different level of production or distribution. Vertical acquisitions involve a company acquiring another company that operates in the production process of the same industry but at a different stage.
Learning Objectives
- Recognize and distinguish between different forms of acquisitions (for instance, horizontal, vertical, and conglomerate).