Cross-border acquisitions are becoming more popular because they allow an acquiring firm to:
A)market a broader range of products and negotiate better contracts with distributors
B)increase profits, better serve customers and gain market control
C)overcome barriers to entering a new market while gaining more control over foreign operations relative to the control offered by alliances
D)exploit resources in the acquired firm, gain new technical knowledge and access new sources of capital

Question

Quizplus · Accepted Answer

Cross-border acquisitions provide an opportunity for the acquiring firm to overcome entry barriers to a foreign market while gaining more control over foreign operations than what is typically offered through alliances. This allows them to better position themselves in the market and gain market control. It also provides access to new resources and knowledge, which may help them to increase profits and better serve customers. Option A is incorrect because although cross-border acquisitions may lead to a broader product range, it is not the primary reason for their popularity. Option B is partially right, but it misses the main point about overcoming entry barriers. Option D is partially right since cross-border acquisitions provide access to new resources and knowledge, but it fails to acknowledge the importance of market control and overcoming entry barriers.

Cross-Border Acquisitions Are Becoming More Popular Because They Allow an Acquiring