If Canfor (lumber products) were to acquire a national homebuilding firm, the combination would be termed a:
A)Horizontal merger.
B)Vertical merger.
C)Conglomerate merger.
D)A spin-off by the national homebuilding firm.

Question

Quizplus · Accepted Answer

A vertical merger occurs when two companies that operate at different levels within the same industry's supply chain combine operations. Canfor, a lumber products company, acquiring a homebuilding firm represents a vertical merger because it combines a supplier (lumber products) with a customer (homebuilding), integrating different stages of the production process within the same industry.

If Canfor (Lumber Products) Were to Acquire a National Homebuilding