When a firm undertakes a merger to improve its sources and supply of raw materials, this is an example of a
A) hostile takeover.
B) friendly merger.
C) financial merger.
D) strategic merger.

Question

Quizplus · Accepted Answer

A merger undertaken to improve sources and supply of raw materials is a strategic merger. This type of merger is usually done to gain access to essential resources, reduce production costs, and increase efficiency. It is not a hostile takeover because it is a mutual decision between the two firms, and it is not merely a financial transaction like a financial merger.

When a Firm Undertakes a Merger to Improve Its Sources