Question

Recently there have been several mergers involving Big Four accounting firms. One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young. This is an example of a__________.

Answer 1

Answer:

The correct answer is: Horizontal Merger.

Explanation:

A Horizontal Merger occurs when companies within the same industry merge. Competing firms that offer similar goods and services are the most likely to merge horizontally. The potential gain in market share is much greater for such companies. They can also create an organization that has the chance to combine operations for more efficient functioning.