When a firm undertakes a merger in order to eliminate redundant functions or increase market share, this is an example of
A) financial merger.
B) friendly merger.
C) hostile takeover.
D) strategic merger.

Question

Quizplus · Accepted Answer

A merger undertaken to eliminate redundant functions or increase market share is a strategic merger, as it is driven by a strategic objective such as improving efficiency or gaining a competitive advantage. A financial merger, on the other hand, typically involves a transaction motivated primarily by financial considerations such as tax benefits or cost savings. A friendly merger is one in which both parties agree to the terms and the merging firms have a cordial relationship. A hostile takeover involves an unfriendly acquisition in which the acquiring company seeks to take over the target firm against its will.

When a Firm Undertakes a Merger in Order to Eliminate