The March 2011 announcement that AT&T was acquiring T-Mobile USA from Deutsche Telekom is a
Acquisition and is intended to
A)vertical; increase diversification.
B)horizontal; increase market power.
C)vertical; overcome entry barriers.
D)related; increase speed to market.

Question

Quizplus · Accepted Answer

The acquisition is horizontal because it involves two companies in the same industry and is intended to increase market power by consolidating their positions. Vertical acquisitions involve companies in different stages of the supply chain and aim to overcome entry barriers or increase diversification. The acquisition is not related to increase speed to market as there is no mention in the scenario of a joint venture for research and development or accessing new technology.

The March 2011 Announcement That AT&T Was Acquiring T-Mobile USA