Which of the following is true of a horizontal merger?
A) The key benefit of this merger stems from the merged firm's increased control over the acquisition of raw materials or the distribution of finished goods.
B) The key benefit of this form of merger is its ability to reduce risk by merging firms that have different patterns of sales and earnings.
C) This form of merger results when two firms in the same line of business are merged.
D) This form of merger occurs when a firm acquires a supplier or a customer.

Question

Quizplus · Accepted Answer

A horizontal merger is a type of merger where two companies operating in the same industry or line of business merge to form a larger entity. The key benefit of a horizontal merger is synergies resulting from combining two similar businesses. These synergies can be achieved through economies of scale, increased market share, and reduced competition. Therefore, option C is the correct choice. The other options do not accurately describe a horizontal merger.

Which of the Following Is True of a Horizontal Merger