ECO 365 Mergers and Joint Ventures
Mergers and Joint Ventures
Mark Bullock
Yvette Castaneda
ECO/365
11/03/2014
BIAGIO VULTAGGIO
Mergers and Joint Ventures
So off the top of your head, can you tell me what the differences between horizontal, vertical and conglomerate mergers? Do you also know how those three differ from a joint venture? I know that from personal experience I wouldn’t be able to off the top of my head. Let’s find out the differences between Horizontal Merger, Vertical Merger, and Conglomerate Merger. Then let’s see how the three differ from a Joint Venture.
A horizontal merger is a merger occurring between companies in the same industry. They are a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. They 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.
A vertical merger is a merger between two companies producing different goods or services for one specific finished product. This occurs when two or more firms, operating at different levels within an industry 's supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one.
A conglomerate merger is a merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.
The differences between horizontal mergers, vertical mergers, and conglomerate mergers are that companies will merge with other companies within the same industry. Another is between two companies that are producing different goods or services for one specific finished product. Finally there are
Mark Bullock
Yvette Castaneda
ECO/365
11/03/2014
BIAGIO VULTAGGIO
Mergers and Joint Ventures
So off the top of your head, can you tell me what the differences between horizontal, vertical and conglomerate mergers? Do you also know how those three differ from a joint venture? I know that from personal experience I wouldn’t be able to off the top of my head. Let’s find out the differences between Horizontal Merger, Vertical Merger, and Conglomerate Merger. Then let’s see how the three differ from a Joint Venture.
A horizontal merger is a merger occurring between companies in the same industry. They are a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. They 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.
A vertical merger is a merger between two companies producing different goods or services for one specific finished product. This occurs when two or more firms, operating at different levels within an industry 's supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one.
A conglomerate merger is a merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.
The differences between horizontal mergers, vertical mergers, and conglomerate mergers are that companies will merge with other companies within the same industry. Another is between two companies that are producing different goods or services for one specific finished product. Finally there are
Citations: Investopedia Horizontal Mergers. (2014). Retrieved from http://www.investopedia.com/terms/h/horizontalmerger.asp According to "Investopedia Horizontal Mergers" (2014), "Definition” (Para. 1). Investopedia Vertiacl Mergers. (2014). Retrieved from http://www.investopedia.com/terms/v/verticalmerger.asp According to "Investopedia Vertiacl Mergers" (2014), "Definition” (Para. 1). Investopedia Conglomerate Merger. (2014). Retrieved from http://www.investopedia.com/terms/c/conlgomeratemerger.asp According to "Investopedia Conglomerate Merger" (2014), "Definitions” (Para. 1). Scilly, S. (2014). Chron: Difference Between Mergers and Joint Ventures. Retrieved from http://smallbusiness.chron.com/difference-between-mergers-joint-ventures-18578.html Scilly (2014), "Specific Information from Article” (Para. 1,2,3,4,5).