Different

Types
of
Mergers
What is a Merger ?
A merger is a business transaction in
which two or more companies combine
their operations and assets to form a
single company. The purpose of a merger
can be to increase market share, achieve
economies of scale, expand into new
markets, or gain access to new technology
or expertise.
 Horizontal Merger
A horizontal merger is a merger or
business consolidation that occurs
between firms that operate in the same
industry. Competition tends to be higher
among companies operating in the same
space, meaning synergies and potential
gains in market share are much greater for
merging firms.
 Vertical Merger
The main objective of a vertical merger is
to improve a company’s efficiency or
reducing costs. A vertical merger occurs
when two companies previously selling
to or buying from each other combine
under one ownership. The businesses are
typically at different stages of production.
Conglomerate Merger
A conglomerate merger is a merger
between firms that are involved in
totally unrelated business activities and
typically occurs between firms within
different industries. Conglomerate
mergers can serve various purposes,
including extending corporate territories
and extending a product range.
Market Extension Merger
A market extension merger takes place
between two companies that deal in the
same products but in separate markets.
The main purpose of the market extension
merger is to make sure that the merging
companies can get access to a bigger
market and that ensures a bigger client
base.
Concentric Merger
A concentric merger is a merger in which
two companies from the same industry
come together to offer an extended
range of products or services to
customers. These companies often share
similar technology, marketing, and
distribution channels, and look to the
concentric merger to create synergies.
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