Most of the biggest mergers and acquisitions since 2000 have been horizontal-i.e.between companies in the same industry.This reflects the fact that:
A)Antitrust authorities have been more concerned with vertical than horizontal mergers and acquisitions
B)By showing that diversification does not offer significant risk-spreading benefits,modern financial theory has undermined the attractions of diversifying mergers and acquisitions
C)Horizontal mergers and acquisitions offer the greatest potential for value creation through cost reduction and moderating competition
D)CEOs favor horizontal mergers and acquisitions because of their desire to eliminate rivals.

Question

Quizplus · Accepted Answer

Horizontal mergers and acquisitions offer the greatest potential for value creation through cost reduction and moderating competition. This is often achieved by eliminating duplication of efforts in production, research and development, and sales and marketing. By combining resources and streamlining functions, companies can reduce costs and increase efficiency, leading to higher profits and increased shareholder value. This is why many companies seek out horizontal mergers and acquisitions as a way to grow their businesses and gain a competitive advantage.

Most of the Biggest Mergers and Acquisitions Since 2000 Have