The Cat Box acquired The Dog House. As part of this transaction, both firms ceased to exist in their prior form and combined to create an all-new entity, Animal World. Which one of the following terms best describes this transaction?
A) Divestiture
B) Consolidation
C) Tender offer
D) Spinoff
E) Conglomeration

Question

Quizplus · Accepted Answer

The transaction described is a consolidation, which involves two or more companies combining to form a new entity. Divestiture involves selling off a portion of a company, tender offer involves a third party offering to buy a controlling stake in a company, spinoff involves creating a new company by separating a division or business unit from a parent company, and conglomerate involves a company diversifying and acquiring businesses in different industries.

The Cat Box Acquired the Dog House