Final answer:
An oil exploration company acquiring an oil refinery undertakes a vertical acquisition, a strategy for controlling multiple steps of production or distribution. This is different from horizontal mergers (same stage of production) or conglomerate mergers (unrelated businesses). The correct answer is option 4) Vertical.
Step-by-step explanation:
An oil exploration company acquiring an oil refinery represents a vertical acquisition. This kind of acquisition is part of a strategy called vertical integration, where a company expands its operations into different steps of the production or distribution process. This is distinct from a horizontal merger, where two companies at the same stage of production combine, and different from a conglomerate merger, which involves companies in unrelated businesses.
Historically, John D. Rockefeller's Standard Oil employed both horizontal and vertical integration to dominate the oil industry. Vertical integration allows a company to control the supply chain, from raw materials to the final product, optimizing costs and efficiency. By acquiring a refinery, the oil exploration company can manage both the exploration and refining phases of oil production.
The correct option for the question is 4) Vertical.