Global Manufacturing Inc.(GMI)
Global Manufacturing Inc. ,a fast-growing U.S.company,plans for a production system in which two components of its product will be manufactured in locations where the cost of production is lowest.The components will then be taken to maquiladoras for final assembly.GMI plans to purchase an existing company in Brazil to produce component A and build a subsidiary in Thailand to produce component B.
-GMI's purchase of the Brazilian company is best classified as a(n)________.

Question

Quizplus · Accepted Answer

GMI's purchase of an existing company in Brazil is classified as an acquisition, as they are acquiring an existing company rather than starting a new project from scratch (greenfield investment) or investing in a portfolio of companies (portfolio investment) or separating/divesting a part of their business (demerger).

Global Manufacturing Inc.(GMI) Global Manufacturing Inc. ,A Fast-Growing U.S.company,plans for a Production System