A U.S.-based insurance firm purchases a company in Germany. The purchase allows the U.S. firm to acquire local resources, knowledge, and expertise while still maintaining control through 100 percent ownership. This process of purchasing a local firm is called __________.

Question

Quizplus · Accepted Answer

When a firm purchases another firm in a different country, it is called an acquisition. This allows the acquiring firm to gain access to local resources, knowledge, and expertise while still maintaining control through ownership. Licensing and franchising involve granting permission to use a company's product or brand, respectively, in exchange for royalties or fees. Authorization refers to permission granted by a government or regulatory body for a company to operate in a certain industry or area. None of these options fully capture the process described in the question. Therefore, the best choice is A) acquisition.

A US-Based Insurance Firm Purchases a Company in Germany