Which of the following is true of a strategic merger?
A)It is undertaken to make money by selling the acquired firm piece by piece.
B)It is undertaken to enhance the business position of the acquiring company.
C)It never has an effect on competition in the acquirer's industry.
D)It usually involves business acquisitions in a completely different industry.

Question

Quizplus · Accepted Answer

A strategic merger is undertaken to enhance the business position of the acquiring company by acquiring a company that complements its existing business or provides access to new markets, technologies, or products. It is not necessarily done to sell the acquired firm piece by piece or to enter a completely different industry. The merger may have an effect on competition in the acquirer's industry, either by increasing or decreasing competition.

Which of the Following Is True of a Strategic Merger