Question

Kooky Cookies Corporation purchased the Crazy Cookie Company. Although this was initially an acquisition, the merging of these two businesses was a __________ merger. Kooky Cookies went on to purchase several baking product companies. Joining forces with some of its suppliers would represent a __________ merger
A. conglomerate; horizontal
B. vertical; horizontal
C. horizontal; vertical
D. conglomerate; conglomerate

Answer 1

Answer:

The correct option is C

Explanation:

Horizontal merger is the one where the merger of the two companies who are competing in the same industry and offering or providing the same kind of goods. Whereas the Vertical merger is the one where the merger of the two companies involve in producing the same good but at different stages of the production.

So, in this case, merger between Kooky Cookies Corporation and Crazy Cookie Company will be horizontal  merger because both companies offering similar products to same customers. And Kooky Cookies purchases baking product, it will be a vertical merger as it involve in the production of cookies but at different levels.