A friendly merger is a ________.
A) merger in which the acquirer gains control of the target firm by buying sufficient shared through private placement
B) merger in which the acquirer can attempt to gain control of the target firm by buying sufficient shares of the target firm in the marketplace.
C) merger transaction that is endorsed by the target firm's management, approved by its stockholders, and easily consummated
D) merger in which the target firm's management acts to deter rather than facilitate the acquisition

Question

Quizplus · Accepted Answer

A friendly merger is a merger transaction that is endorsed by the target firm's management, approved by its stockholders, and easily consummated. In other words, both parties agree to the merger and work together towards its completion. Option A represents a private placement of shares, which is not necessarily related to a friendly merger. Option B describes a hostile takeover attempt, which is the opposite of a friendly merger. Option D describes a situation where the target firm's management is resistant to the merger, which makes it a hostile takeover attempt rather than a friendly merger.

A Friendly Merger Is a ________