Corporate Merger
A corporate merger is a process in which two or more companies join together—often through the purchase or sale of companies—to form a single, larger company. This is typically accompanied by a change in legal form.
Types of Corporate Mergers
There are three main types of corporate mergers:
Horizontal mergers:
In this type of merger, two companies that operate in the same business sector or industry join forces. This can help increase market power and reduce competition.
Vertical Mergers:
In a vertical merger, two companies that operate at different stages of the same supply or production chain merge. This can lead to cost savings for the merged company, improved efficiency, and greater control over the supply chain.
Conglomerate mergers:
In a conglomerate merger, companies from different—often entirely distinct—industries join forces. This type of merger helps spread risk and increase diversification.
Circular mergers:
In this case, companies from the same industry that offer different products or services merge. This can help expand the merged company’s product portfolio and increase its competitiveness.