Which of the following is true of a conglomerate merger?
A) It occurs when a firm acquires a supplier or a customer.
B) It involves the combination of firms in unrelated businesses.
C) It is achieved by acquiring a firm that is in the same general industry but neither in the same line of business nor a supplier or customer.
D) It results in the expansion of a firm's operations in a given product line and at the same time eliminates a competitor.

Question

Quizplus · Accepted Answer

A conglomerate merger involves the combination of firms in unrelated businesses. The other options describe different types of mergers. A vertical merger (A) involves acquiring a supplier or a customer, a conglomerate merger (B) involves unrelated businesses, a lateral merger (C) involves acquiring a firm in the same general industry but not in the same line of business, and an horizontal merger (D) results in the expansion of a firm's operations in a given product line and eliminates a competitor.

Which of the Following Is True of a Conglomerate Merger