Asked by samuel morales on May 25, 2024
Verified
If a petrochemical firm that used oil as feedstock merged with an oil producer that had large oil reserves and a drilling subsidiary,this would be a vertical merger.
Vertical Merger
Occurs when a company acquires another firm that is “upstream” or “downstream”; for example, an automobile manufacturer acquires a steel producer.
Petrochemical Firm
A company involved in the production of chemical products derived from petroleum and natural gas.
Oil Reserves
Quantified estimates of the amount of crude oil located in a specific economic region that can be recovered and sold under current economic and technological conditions.
- Identify different types of mergers and strategic rationales behind them.
Verified Answer
GG
Guillermo GarcésMay 29, 2024
Final Answer :
True
Explanation :
A vertical merger is when two companies from different levels of the supply chain merge. In this case, the petrochemical firm and the oil producer with a drilling subsidiary would be merging from two different levels of the oil supply chain.
Learning Objectives
- Identify different types of mergers and strategic rationales behind them.