A vertical merger occurs when:
A) the products of the merging firms were not related in any manner before the merger.
B) one firm is a producer of products, and the other firm is a producer of services.
C) one firm is a domestic firm, and the other is a foreign company.
D) the firms stood in a buyer-seller relationship before the merger.
E) the merger partners were competitors.

Question

Quizplus · Accepted Answer

A vertical merger occurs when the merging firms had a buyer-seller relationship before the merger, where one firm was a supplier of goods or services to the other firm. Vertical mergers are aimed at achieving greater efficiency, lowering costs, and improving supply chain coordination.

A Vertical Merger Occurs When