A conglomerate merger
A) can extend the line of products sold, extend the territories in which products are sold, or combine totally unrelated products.
B) is defined as a merger involving two firms that previously had a buyer-seller relationship.
C) is defined as a merger involving two firms producing the same or similar products and selling them in the same geographical market.
D) is illegal, per se.

Question

Quizplus · Accepted Answer

A conglomerate merger involves the combination of two firms that are in different industries or have no obvious common business interest. These mergers often extend the range of products sold or extend territories in which products are sold. They may also combine totally unrelated products. Therefore, option A is the correct answer. Option B describes a vertical merger, while option C describes a horizontal merger. Option D is incorrect as conglomerate mergers are legal unless they create a monopoly or harm competition.

A Conglomerate Merger