In 1999, two pharmaceutical companies that held an equal market share decided to pool their operations to create a new firm that was known by a different name. This is an example of a(n):
A) merger.
B) acquisition.
C) procurement.
D) takeover.
E) dissolution.

Question

Quizplus · Accepted Answer

A merger occurs when two companies combine to create a new company, often with a new name. This scenario describes two companies with equal market share deciding to pool their operations into a new firm, which fits the definition of a merger. A is the correct answer. An acquisition is when one company buys another, usually resulting in the acquired company becoming a subsidiary of the acquiring company. Procurement involves acquiring goods or services from an external source. A takeover is when one company takes control of another without the consent of its management. Dissolution is the process of winding up a company's business and ending its existence.

In 1999, Two Pharmaceutical Companies That Held an Equal Market