A merger occurs when:
A)one firm buys controlling interest in another firm
B)two firms agree to integrate their operations on a relatively coequal basis
C)two firms combine to create a third separate entity that conducts one given function
D)two firms agree to share certain information, but their operations remain independent

Question

Quizplus · Accepted Answer

A merger occurs when two firms agree to integrate their operations on a relatively coequal basis. This typically involves the creation of a new entity that combines the assets and operations of both companies. Option A describes an acquisition, Option C describes a consolidation, and Option D describes a strategic alliance or joint venture.

A Merger Occurs When