The nature of work and work timings of the animation department of a movie production company differs from that of other departments of the company. Hence, the company decides to branch this department out into a new company by selling the stock to outside investors. In this scenario, the company is using a strategy called:
A) conglomerate merger.
B) acquisition.
C) carveout.
D) acquisition.

Question

The nature of work and work timings of the animation department of ​a movie production company differs from that of other departments of the company. Hence, the company decides to branch this department out into a new company by selling the stock to outside investors. In this scenario, the company is using a strategy called:
A) conglomerate ​merger.
B) ​acquisition.
C) ​carve­out.
D) acquisition.

Quizplus · Accepted Answer

Carve-out is a strategy where a company sells a portion of its business by creating a new company or subsidiary. In this scenario, the animation department is being separated into a new company by selling the stock to outside investors, which fits the definition of a carve-out strategy. It is not an acquisition or a conglomerate merger because the company is not being bought or merged with another company.

The Nature of Work and Work Timings of the Animation