Comprehension

Mergers: Read the case and answer the questions (46-50)
Gaurav owned an event management company called 'Lotus Ltd.' in Mumbai. He used to organise weddings, meetings, conferences, etc. These events were full of activities, music, food and entertainment. He used to outsource decoration material, food as well as entertainment from different vendors.
Ms. Geetika was an owner of catering and decoration company called Miles Ltd. in Mumbai. She used to cater the food and decoration needs of various customers such as corporate as well as family functions.
Gaurav & Geetika were performing well in their respective businesses until covid-19 lockdown was introduced. Due to lack of demand for food, decoration and events, both the companies started facing losses. As the lockdown was lifted, nearly after a year, both Gaurav and Geetika were facing problems in managing their increasing operational costs with lesser number of customers. As they were planning to look for better business opportunity, they got to meet each other at an 'exponential' organised by trades of Mumbai at BKC ground.
In this 'exponential', there were different traders sharing their business ideas with each other. Hence, it was here that Gaurav and Geetika decided to restart their business by merging their operations with a new company name. 'G2 Lotus Miles Ltd'. They both shared their contacts of vendors and sutomers with each other and started getting order for events, food, decoration, entertainment, etc. Their business started blooming as their costs were lesser and more customers with demand of services given by Gaurav and Geetika.
Now its been two years that both of them have grown their business into other cities of Maharastra like, Pune. Ahmednagar and Nagpur under the company name of 'G2 Lotus Miles Ltd'. The company is growing with increased annual sales of 30%.

Question: 1

Which of the following is applicable in case of "G2 Lotus Miles Itd"?

Updated On: Sep 16, 2024
  • Product extension merger
  • Market extension merger
  • Vertical merger
  • Horizontal merger
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The Correct Option is A

Solution and Explanation

The correct option is (A) : Product extension merger
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Question: 2

The new company so formed "G2 Lotus Miles Ltd" is an example of:

Updated On: Sep 16, 2024
  • Acquisition
  • Franchising
  • Amalgamation
  • Absorption
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The Correct Option is C

Solution and Explanation

The correct option is (C) : Amalgamation
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Question: 3

"G2 Lotus Miles Ltd." is related to-

Updated On: Sep 16, 2024
  • Manufacturing
  • Service
  • Distribution
  • Trading
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The Correct Option is B

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The correct option is (B) : Service
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Question: 4

Match List I with List II

List-I

List-II

(A)Event Management Company(I)Miles Ltd.
(B)External Expansion(II)Lotus Ltd.
(C)Operational synergy(III)Merger
(D)Catering and decoration company(IV)G2 Lotus Miles Ltd

Choose the correct answer from the options given below:

Updated On: Sep 16, 2024
  • A-I, B-III, C-II, D-IV
  • А-ІІ, В-ІІІ, С-IV, D-I
  • A-III, B-II, C-IV, D-I
  • A-IV, B-III, C-II, D-I
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The Correct Option is B

Solution and Explanation

The correct option is (B) : А-ІІ, В-ІІІ, С-IV, D-I
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Question: 5

If Gaurav could raise sufficient funds to acquire 'Miles Ltd'. This acquisition would be called:

Updated On: Sep 16, 2024
  • Friendly Acquisition
  • Reverse Acquisition
  • Back flip Acquisition
  • Hostile Acquisition
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The Correct Option is A

Solution and Explanation

The correct option is (A) : Friendly Acquisition
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