Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin America. To that end, Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary. Keith Moon, Blickinstock's vice president of global business development, will be making a presentation to the board outlining the company's options.
-Blickinstock has identified a company that it can acquire or merge with.Which of the following statements would represent the least likely reason for Blickinstock to go ahead with the merger?
A) The merger would help increase Blickinstock's global competitiveness.
B) The merger would allow the company to get a foothold in the nascent Latin American market.
C) The merger would help to fill the gaps in Blickinstock's product line.
D) The merger would bring in increased cash-flows that Blickinstock can use to acquire other firms.

Question

Quizplus · Accepted Answer

The scenario does not mention Blickinstock's intention to acquire other firms, so increased cash-flows for that purpose would not be a primary reason for the merger. A, B, and C are all valid reasons for the company to consider the merger.