Which of the following statements best describes mergers?
A) The purchase of Red Lobster Restaurant initiated by Remax Realty is an example of conglomerate mergers.
B) A merger can be blocked by either a firm's customers or suppliers, not the government.
C) The existence of golden parachutes is a reason that the management of a target company tries to block a takeover.
D) None of the above.

Question

Quizplus · Accepted Answer

A merger is a combination of two or more companies into one new company. In a conglomerate merger, the two companies are in different industries. The purchase of Red Lobster Restaurant by Remax Realty is an example of a conglomerate merger because Red Lobster is in the restaurant industry and Remax Realty is in the real estate industry.

Which of the Following Statements Best Describes Mergers