United Airlines' purchase of Continental Airlines combines the resources and capabilities of both firms to create the world's largest airline. The newly formed company is an example of a ______.
A) vertical merger
B) joint venture
C) horizontal merger
D) conglomerate merger

Question

Quizplus · Accepted Answer

The merger between United Airlines and Continental Airlines is an example of a horizontal merger, as both airlines were operating in the same industry and were direct competitors before the merger. A vertical merger would involve companies at different stages of the production process, a joint venture involves a temporary partnership for a specific project or purpose, and a conglomerate merger involves companies from different industries or businesses.

United Airlines' Purchase of Continental Airlines Combines the Resources and Capabilities