A merger between a tire manufacturer and an automobile manufacturer is an example of:
A)a horizontal merger.
B)a vertical merger.
C)a product extension merger.
D)None of the above

Question

Quizplus · Accepted Answer

A merger between a tire manufacturer and an automobile manufacturer is an example of a vertical merger, as the two companies are in different stages of the same supply chain. The tire manufacturer supplies a product needed by the automobile manufacturer, making it a vertical integration of production processes. A horizontal merger involves two companies operating in the same industry or market, while a product extension merger involves two companies in unrelated industries collaborating to extend their product lines.

A Merger Between a Tire Manufacturer and an Automobile Manufacturer