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Consolidating effect of mergers and acquisitions

Firms have more than one option for diversifying; among these options are the following: corporate entrepreneurship, strategic alliances, and mergers and acquisitions. Mergers and acquisitions can have a consolidating effect in the industry, and may force other industry players to merge. When a company 'buys' another company with a cash transaction, a newly legal entity is formed.

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This is true. The last sentence makes a really interesting point, and that's because many people don't know that the Federal Trade Commission (FTC) actually has veto power over acquisitions ...

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This solution discusses the mergers and acquisitions question listed. A thorough explanation is provided.