One of the major reasons for merger is to?

A. reduce the number of unskilled manpower
B. increase the number of skilled manpower
C. prevent liquidation
D. liberalize the market

Correct Answer:

Option C – prevent liquidation

Explanation

Synergy: One of the main reasons why companies merge or acquire other companies is to create a synergy. Synergy is the concept that, the value of the combined companies will be greater than the joint value of the two individual companies. This will in turn prevent liquidation or folding up of a company