Two years ago, Jason Jennings and Mary Scott each owned a small chain of bagel restaurants in Orange County, California. Just recently, they decided to pool their interests and combine their individual chains of restaurants into one chain. What Jason and Mary did with their firms is called a:
A) licensing agreement
B) strategic alliance
C) acquisition
D) joint venture
E) merger

Question

Quizplus · Accepted Answer

The combination of two previously separate chains of restaurants into one larger chain is a type of merger. A merger involves two companies combining into a single entity, with each company giving up its separate existence and becoming part of the new entity. This is different from a joint venture or a strategic alliance, which involve two separate companies working together on a specific project or initiative while maintaining their individual identities. An acquisition would involve one company purchasing another company outright, which is not what happened in this scenario. A licensing agreement involves one company allowing another company to use its intellectual property or brand in exchange for payment.

Two Years Ago, Jason Jennings and Mary Scott Each Owned