What are the prerequisites for a horizontal merger? Note: There are 2 correct answers to this question.

What are the prerequisites for a horizontal merger? Note: There are 2 correct answers to this question.
A . Both consolidation units have the same investors.
B . Both consolidation units belong to different consolidation groups.
C . Both consolidation units have the different investors.
D . Both consolidation units belong to the same consolidation group.

View Answer

Answer: B, C

Explanation:

In the context of financial consolidation and reporting, particularly for a horizontal merger, the prerequisites typically include:

Both consolidation units belong to different consolidation groups: For a horizontal merger to be relevant, it generally involves the combination of two units from different consolidation groups. This reflects the consolidation of entities that were previously separate in terms of their group reporting structures.

Both consolidation units have different investors: This prerequisite suggests that the consolidation units being merged should have distinct investor bases prior to the merger. The concept of different investors is important in distinguishing the entities as separate before the merger.