a.
To discuss: The significance of the four economic classifications of mergers on the likelihood of governmental intervention.
Introduction:
A process or an agreement where two or more firms combines together to form one new company is termed as Mergers.
a.
Explanation of Solution
The significance of the four economic classifications of mergers on the likelihood of governmental intervention is as follows:
The mergers that result in the government intervention from the four economic classifications of mergers are as follows:
- Vertical mergers
- Horizontal mergers
These types of mergers would result in the operating synergy.
b.
To discuss: The significance of the four economic classifications of mergers on the possibilities for operating synergy.
b.
Explanation of Solution
The significance of the four economic classifications of mergers on the possibilities for operating synergy is as follows:
The Conglomerate merger takes place when a dissimilar company combines together to form a new company. However, the congeneric merger occurs with same general industry. Both these mergers are not attacked by the government and even they provide less synergistic benefits.
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Chapter 21 Solutions
Fundamentals of Financial Management (MindTap Course List)
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