A company that cuts and packages paper for photocopiers and printers that merges with a paper mill to reduce the risk of paper shortages is using a(n)
A) poison pill merger.
B) enterprise merger.
C) friendly takeover bid.
D) hostile takeover.
E) vertical merger.

Question

Quizplus · Accepted Answer

The described merger is a vertical merger, as it involves two companies at different stages of the production process coming together (the paper cutting and packaging company and the paper mill). The goal is to reduce the risk of paper shortages by having more control over the production and supply chain.

A Company That Cuts and Packages Paper for Photocopiers and Printers