Golden Gate Mining Co. (GGMC) currently has a gold mine operating in Canada and is looking to purchase another gold mine in Peru, operating as Inca Gold Inc. (ICI). You currently work for the CFO at GGMC, who has asked for your help in making a presentation to the board of directors concerning this possible acquisition.

Required:

a) ExplainthedifferencesbetweenthepurchaseofthenetassetsofICIandthe purchase of shares of ICI.

b) Does this merger represent a horizontal merger or a vertical merger? What would be an example of the other merger type?

c) Identify and explain three possible motivations that might be behind this acquisition.