A shoe manufacturing firm acquiring a brokerage house is an example of a
a. Horizontal merger.
b. Vertical merger.
c. Congeneric merger.
d. Conglomerate merger.
Answer:D
Answer (d) is correct The requirement is to identify the type of merger.
Answer (d) is correct because a conglomerate merger is a merger of companies in totally different industries. A shoe manufacturer and brokerage house are in totally different industries.
Answer (a) is incorrect because a horizontal merger is a combination of two firms producing the same type of good or service.
Answer (b) is incorrect because a vertical merger is a merger between a firm and one of its suppliers or customers.
Answer (c) is incorrect because a congeneric merger is a merger of firms in the same industry, but the two firms do not have a customer or supplier relationship (as in vertical merger).