Nova Airlines' purchase of Emu Airlines combines the resources and capabilities of both firms to create the world's largest airline.The newly formed company is an example of a _____.
A)vertical merger
B)joint venture
C)horizontal merger
D)conglomerate company

Question

Quizplus · Accepted Answer

A horizontal merger occurs when two companies operating in the same industry, often as competitors, combine resources and capabilities to create a larger entity. In this case, Nova Airlines and Emu Airlines, both presumably operating within the airline industry, are merging to form the world's largest airline, which is a classic example of a horizontal merger.

Nova Airlines' Purchase of Emu Airlines Combines the Resources and Capabilities