Question

Flexible Fittings was a small manufacturing company that made shut-off valves for gas pipe used in home and building construction. Flexible purchased the General Gas Pipeline Company, which was Flexible Fittings' largest customer. This strategic decision bringing the two companies together is called a

Answer 1

Merger.

A merger is the joining of 2 or more businesses to create a single, larger company.

Answer 2

Answer: forward vertical integration

Flexible Fittings was a small manufacturing company that made shut-off valves for gas pipe used in home and building construction. Flexible purchased the General Gas Pipeline Company, which was Flexible Fittings' largest customer. This strategic decision bringing the two companies together is called a forward vertical integration.

This is when two companies decide to merge, however in this scenario, flexible fittings it’s a forward merger because, a manufacturer is taking over a supplier.