Aztex inc., an automobile manufacturing firm, merges with blaze inc., a firm that manufactures tires, in order to limit the uncertainty of fluctuating supply of automobile tires and reduce the production cost for its cars. this merger is an example of a (n) :

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Business

Eddie Schmitt

20 September, 20:03

Aztex inc., an automobile manufacturing firm, merges with blaze inc., a firm that manufactures tires, in order to limit the uncertainty of fluctuating supply of automobile tires and reduce the production cost for its cars. this merger is an example of a (n) :

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Maleah Reyes · Answer 1

This merger is an example of "vertical merger".

A vertical merger refers to a merger which is between two companies or organizations that deliver different services and administrations or parts along the esteem chain for some last item. Mergers between such organizations or companies happen with an end goal to decrease generation expenses and increment productivity for higher benefits.

To represent, assume company ABC produces shoes and company DEF produces leather. DEF has been ABC's calfskin provider for a long time, and they understand that by going into a merger together, they could cut expenses and increment benefits. They combine vertically in light of the fact that the leather delivered by ABC is utilized as a part of ABC's shoes.