Series 79 practice questionmediumMerger Types
A large consumer products company acquires a technology firm that develops artificial intelligence software. These companies have no supply chain relationship and operate in entirely different industries. This is an example of a:
- AHorizontal merger
- BVertical merger
- CConglomerate merger✓ Correct answer
- DStatutory merger
Explanation
Why C — Conglomerate merger
A conglomerate merger involves the combination of two companies that operate in unrelated industries with no direct competitive or supply chain relationship. The primary motivation is typically diversification of business risk across different sectors. Conglomerate mergers generally face the least antitrust scrutiny because they do not directly reduce competition in any single market.
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