Which of the following statements is true about horizontal mergers?
A)Horizontal mergers result from an intention to achieve economies of scale.
B)Horizontal mergers result in the fragmentation of the industry.
C)Horizontal mergers has been a very successful concept so far with zero cases of failure.
D)Companies that establish a network of linked merchandising outlets to obtain advantages of cost leadership are known as horizontal mergers.
E)Companies that adopt the strategy of centralization to gain control over all business units are known as horizontal mergers.

Question

Quizplus · Accepted Answer

Horizontal mergers are aimed at achieving economies of scale by combining two or more companies that produce similar products or services. This enables the merged company to lower costs by sharing resources and spreading fixed costs over a larger output.

Which of the Following Statements Is True About Horizontal Mergers