In a January 18, 2006, BusinessWeek online article appearing in its Standard & Poor's MarketScope, shares of Puma common stock rose on speculation that the company was a takeover target of rival giant Nike. If the merger were approved, Nike would surely attain world dominance in sports footwear. Mergers in the footwear industry are not uncommon, as evidenced by Adidas Solomon's acquisition of Reebok International.

Instructions

Explain how the merger, if approved, may impact Nike's economies of scale.