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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  1. What is a typical day in the life of someone in M&A? How long does a project last?

    The life of a financial professional involved in the field of mergers and acquisitions can, like any line of work, vary considerably ... Read Full Answer >>
  2. How long does it take for a merger to go through?

    Corporate mergers and acquisitions can vary considerably in the time they take to be completed. There are a number of individual ... Read Full Answer >>
  3. Why do companies merge with or acquire other companies?

    Some of the reasons for mergers and acquisitions (M&A) include: 1. Synergy: The most used word in M&A is synergy, ... Read Full Answer >>
  4. How do you make working capital adjustments in transfer pricing?

    Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax ... Read Full Answer >>
  5. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
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    Even the simplest merger and acquisition (M&A) deals are challenging. It takes a lot for two previously independent enterprises ... Read Full Answer >>

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