Series 79 practice questioneasyMerger Types
A merger between two companies in the same industry that are direct competitors is classified as which type of merger?
- AHorizontal merger✓ Correct answer
- BVertical merger
- CConglomerate merger
- DReverse merger
Explanation
Why A — Horizontal merger
A horizontal merger involves the combination of two companies that operate in the same industry and are direct competitors. These mergers often raise antitrust concerns because they reduce competition within the market. Regulators scrutinize horizontal mergers more closely under the Hart-Scott-Rodino Act and Clayton Act.
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