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

The correct answer is C

Step-by-step explanation:

Horizontal merger is the merger or association of the two companies which are competing in the same industry and providing the same kind of goods. On the other hand, the Vertical merger is the merger of the two companies who are involve in producing the same type of good but at the different stages of the production.

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