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_________

a. horizontal merger.
b. vertical merger.
c. hostile acquisition.
d. conglomerate merger.

Answer 1

Answer: The correct option is B. Vertical Merger.

Explanation: A vertical merger is the combination of two or more companies that are involved in different stages of the supply chain of a common product or service.

Most often, a merger happens in order to increase synergies, gain more control of the supply chain process, and drive up business. A vertical merger will often result in incurring of lower costs, while increasing productivity and efficiency of the companies involved.

Answer 2

b. vertical merger.

Step-by-step explanation:

A vertical merger is the joining of two firms at different stages of related businesses..