If ABC steel buys NextGen Iron Ore to assure itself of a constant flow of ore,it will be an example of a _____.
A)conglomerate company
B)domestic company
C)vertical merger
D)subsidiary corporation

Question

Quizplus · Accepted Answer

A vertical merger occurs when two companies operating at different levels within the same industry's supply chain combine operations. ABC Steel buying NextGen Iron Ore, a supplier, is an example of a vertical merger because it integrates a supplier with a manufacturer to secure a steady supply of raw materials.

If ABC Steel Buys NextGen Iron Ore to Assure Itself