Vertical Backward Merger via Raw Material Acquisition

Steps:

• Identify the acquirer's business: Swedish firm manufactures furniture, needing wood as input.
• Examine the target's assets: Romanian firm owns 8300 hectares of trees, a source of raw wood.
• Assess integration direction: Acquiring a supplier of raw materials moves upstream in the supply chain.
• Classify merger type: This backward integration secures inputs, fitting vertical backward merger.

Why C is correct:

• Vertical backward merger defined as acquiring a supplier to control raw material sources, directly matching furniture maker buying tree owner.

Why the others are wrong:

• A. Diversification: Involves unrelated businesses; here, trees relate directly to furniture production.
• B. Horizontal: Merges competitors at same production stage; target supplies inputs, not competes.
• D. Vertical forward: Acquires downstream distributor or retailer; trees are upstream supplier.

Final answer: C