Company A and Company F have been in direct competition for many years. Recently, an announcement was made of a merger between the two companies. This would be a
A) reverse merger.
B) joint venture.
C) vertical merger.
D) friendly takeover.
E) horizontal merger.

Question

Quizplus · Accepted Answer

A merger between two companies that are in direct competition with each other (as described in the scenario) is known as a horizontal merger. Other types of mergers include vertical mergers (between companies in different stages of the same supply chain), reverse mergers (where a private company becomes a public company by merging with a public shell company), joint ventures (a partnership between two companies for a specific project or purpose), and friendly takeovers (where the target company agrees to the acquisition).

Company a and Company F Have Been in Direct Competition