The acquisition of a firm in a different production process stage than the bidder is called a:
A) Conglomerate acquisition.
B) Forward acquisition.
C) Backward acquisition.
D) Horizontal acquisition.
E) Vertical acquisition.

Question

Quizplus · Accepted Answer

Vertical acquisition occurs when a firm acquires another company that operates in a different stage of the production process. For example, a manufacturer purchasing a supplier (backward integration) or a distributor (forward integration) would be engaging in vertical acquisition.

The Acquisition of a Firm in a Different Production Process