Title: Mergers and Acquisitions
Course: Demo 1

Q: When two companies combine to form a new company it is called a(n):
- acquisition
- franchise
- merger
A: merger

Q: When one company purchases and absorbs another company it is called a(n):
- merger
- franchise
- acquisition
A: acquisition

Q: In 2014 Microsoft purchased the popular game Minecraft for $2.5B. This is an example of a(n):
- merger
- hostile takeover
- acquisition
A: acquisition

Q: In 2014 Microsoft purchased the popular game Minecraft for $2.5B. Microsoft provides a wide range of computer software, such as Internet Explorer and Microsoft Word, and devices, such as the Windows mobile phone and the xBox game system. Minecraft is a computer game that allows players to create virtual worlds. Microsoft likely purchased Minecraft to:
- expand distribution channels
- realize economies of scale
- gain complementary products
A: gain complementary products

Q: In 2012 Disney purchased Lucasfilm and the rights to the Star Wars franchise. As a result Disney will now earn revenues from the Star Wars movies and the associated licensed merchandise which they will sell in the Disney store, their theme parks and websites. The most likely reason that Disney purchased the rights to the Star Wars franchise was to:
- expand distribution channels
- realize economies of scale
- gain complementary products
A: gain complementary products

Q: Charter Communications is seeking to purchase and bring together Time Warner Cable and Bright House Networks, creating a company that will serve a collective 18.8 million Internet broadband subscribers and 17 million TV subscribers. Charter has specifically cited a desire to have greater bargaining power in negotiating with channel owners like Disney. Charter is likely seeking to:
- gain complementary products
- expand distribution channels
- realize economies of scale
A: realize economies of scale

Q: AT&T’s proposed $39 billion acquisition of T-Mobile USA would have combined two of the four major national providers of mobile telephone services for both individuals and businesses. As a result of this acquisition, AT&T would be the provider of almost 40% of all mobile service, with Verizon and Sprint making up the remainder of the market. One of the primary reasons that AT&T would seek to acquire T-Mobile USA is to:
- gain complementary products
- expand distribution channels
- realize economies of scale
A: realize economies of scale