Question

Merger and acquisition is implemented by companies those target

• A. expansion and growth
• B. name and fame
• C. labour intensive production
• D. capital intensive production

Hint:

Think about why a company pays to buy another company: it wants to grow faster than it could alone.

Answer 1

The Correct Option is A

A merger is when two companies join into one, and an acquisition is when one company buys and takes control of another. Companies do this for a business reason, not just to feel important. Let's look at what each option means.

1. expansion and growth: A merger or acquisition lets a company grow fast. It gets new markets, more customers, extra production capacity, or new technology in one move, instead of building all this from scratch over years. This is the real reason firms go for M&A deals.
2. name and fame: A company's reputation can improve after a good merger, but no firm spends crores of rupees just to look famous. This is a side effect, not the target.
3. labour intensive production: M&A is a financial and strategic move. It has nothing to do with choosing how much manual labour a factory uses.
4. capital intensive production: Same problem as above. Whether a plant uses more machines or more workers is a manufacturing choice, not a reason for merging with another firm.

Since a merger or acquisition is mainly a tool to grow the business quickly, gain market share, and add new strengths, the correct option is "expansion and growth".

Let's summarize:

• Mergers and acquisitions help a company grow faster than it could on its own.
• Fame, labour use, or capital use are not the real business targets behind an M&A deal.

So the answer is option (1), expansion and growth.