A bakery acquires a wheat farm to ensure a steady supply of flour. What type of merger is this?

Answer 1

The acquisition of a wheat farm by a bakery to ensure a steady supply of flour is an example of a vertical merger. This type of merger occurs when a company acquires another company that is at a different stage of the supply chain. In this case, the bakery (which processes and sells flour products) is merging with the wheat farm (which produces the wheat used to make flour), thus securing its raw material supply.