Assume that a grocery chain like Trader Joe's and a shoe manufacturer like Nike are merging. The conglomerate merger is the most appropriate term to describe this type of merger.
A conglomerate merger is a union of companies engaged in completely unrelated commercial endeavors. These mergers often involve businesses from several industries or various geographical regions.
The union of the Walt Disney Company with the American Broadcasting Company is one instance of a conglomerate merger. It is doubtful that the target or the bidder will get economic gains from a conglomerate merger because it involves two strategically unrelated companies.
The benefit of diversifying corporate operations and target markets is offered to merge organizations by conglomerate mergers. Due to the various industries and/or markets in which the merging companies operate, the merged company is less susceptible to sales reductions in a particular industry or market.
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