Vertical Merger

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Dictionary Says

Definition of 'Vertical Merger'

A merger between two companies producing different goods or services for one specific finished product.
Investopedia Says

Investopedia explains 'Vertical Merger'

By directly merging with suppliers, a company can decrease reliance and increase profitability. An example of a vertical merger is a car manufacturer purchasing a tire company.

Related Definitions

  • Economies Of Scale

    The increase in efficiency of production as the number of goods being produced increases. Typically, a company that achieves economies of scale lowers the average cost per unit through ...
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  • Horizontal Merger

    A merger occurring between companies in the same industry. Horizontal merger is a business consolidation which occurs between firms who operate in the same space, often as competitors ...
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  • Hostile Takeover

    The acquisition of one company (called the target company) by another (called the acquirer) that is accomplished not by coming to an agreement with the target company's management, but ...
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    • Merger

      The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.
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    • Vertical Integration

      When a company expands its business into areas that are at different points of the same production path.
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    • Congeneric Merger

      A type of merger where two companies are in the same or related industries but do not offer the same products. In a congeneric merger, the companies may share similar distribution ...
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    • Diversification Acquisition

      A corporate action in which a company purchases a controlling interest in another company in order to expand its product and service offerings. One way to determine if a takeover is a ...
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