Question

Laurie Corp., a major watch manufacturer, purchases Smith Inc., a smaller company that makes watch bands. Following this purchase, the watch band operations are performed by the Smith Division of Laurie Corp. This scenario is an example of an acquisition. True or false?

Answer 1

Answer: True

Explanation: The given case does illustrates business acquisition. Business acquisition refers to the process in which one company purchases majority or all of the shares of another company.

In the given case, Laurie corp. purchased Smith inc. and the part of production is then transferred to the purchased company for the ease of operations.

Hence, from the above we can conclude that the answer is true.