Answer:The answer is increased their operations, the business is a conglomerate, The operating supplies is subject to wild pricing swing, operation of the business in dangerous part of the world reduces the profit.
Explanation:
Merger is the joining of two or more independent company's into one bigger and United company. The procedures for merger involved the adoption of the resolution of a merger by the board of directors of the two companies, the resolution will set out the new name to be adopted, the terms and conditions of the merger. It also includes the method of converting securities, the plan must be adopted by the two- third majority of the shareholders of both firms. Then all necessary documents will then be submitted to the registrar of company, the registrar of company will then issue a certificate of merger it then that the merger comes into existence. The merger of two companies ensures the raising of enough capital for business. It also ensures the reduction of competition between rivals,it also gives the business the opportunity to compete favourably with other well established firms. It may also ensures the diversification of their range of products and ensures the efficiency of the business.
A merger can be a conglomerate merger, a conglomerate is a merger between two or more different companies under a common ownership and runs as a single organization. The business may be doing a business which are not related before the merger and they may be operating in a different industries or in a different geographical locations.
A price swing is a rise and fall in the sum or amount of money at which a product is valued in the market. The price of a product such as operating supplies may be moving forward or backward in the market which may affect the supply of such a product. The price of a product in the market is determined by the market mechanism which is the force interplay of both demand and supply.
Oversea operation is the expansion of the business to other parts of the world with a view to gain a market share of the market and improve on the profitability of the business. When a company is operating in the dangerous parts of the world such as a country where there is terrorist activities or where there is civil war, it affects their operations and has a great effect on the company's investment in such countries such a company may be forced to close their operations in such a war ravage countries which will affect the profit of the company. It often leads to the reduction in the company's profits when the final account of the company's is prepared.
