Star Airlines' purchase of Hispania 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 company

Question

Quizplus · Accepted Answer

A horizontal merger is a merger between two companies that compete in the same industry or market. In this scenario, Star Airlines and Hispania Airlines both operate in the airline industry, making this a horizontal merger. A vertical merger involves companies in different stages of the same industry, a joint venture involves two or more companies collaborating on a specific project or goal, and a conglomerate company is a company that diversified into various unrelated industries.

Star Airlines' Purchase of Hispania Airlines Combines the Resources and Capabilities