Question:

In ________________ acquisition, a public company is taken over by a private company.

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Reverse Acquisition = Private company takes over public company. Think: “Reverse” = switching from private to public status quickly.
  • Friendly
  • Reverse
  • Backflip
  • Hostile
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The Correct Option is B

Solution and Explanation

A Reverse Acquisition (or Reverse Merger) occurs when a private company takes over a public company. This allows the private company to become publicly listed without going through the lengthy process of an initial public offering (IPO). Other types:
Friendly Acquisition: Acquisition agreed upon by both companies.
Backflip Acquisition: Acquiring company becomes a subsidiary of the acquired company.
Hostile Acquisition: Acquisition without the consent of the target company's management. Hence, the correct answer is (B) Reverse.
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