Horizontal Merger


DEFINITION of 'Horizontal Merger'

A merger occurring between companies in the same industry. Horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry.


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BREAKING DOWN 'Horizontal Merger'

This type of merger occurs frequently, because of larger companies attempting to create more efficient economies of scale. The amalgamation of Daimler-Benz and Chrysler is a popular example of a horizontal merger.

Conversely, a vertical merger takes place when firms from different parts of the supply chain consolidate in order to make the production process more efficient or cost effective.

  1. Vertical Merger

    A merger between two companies producing different goods or services ...
  2. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased ...
  3. Diversification Acquisition

    A corporate action in which a company purchases a controlling ...
  4. Congeneric Merger

    A type of merger where two companies are in the same or related ...
  5. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  6. Horizontal Integration

    The acquisition of additional business activities that are at ...
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  3. Why do companies merge with or acquire other companies?

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