Types of Mergers
The term ‘merger’ refers to an occasion when two or more companies or organisations join together to make one larger company.[1]These mergers can take place in various forms as mentioned below:
A vertical merger takes place among companies functioning at different levels of the supply chain in one industry. These types of mergers focus on improving the performance in cost-effective and efficient manner.
This type of merger takes place among the companies providing the same goods or services generally as competitors in the market. Horizontal mergers take place among companies or industries which are few in number which leads to an increase in the competition in the market.
A conglomerate merger is the one which takes place between companies involved in unrelated business. These mergers can be further classified into two types namely- pure and mix. A pure conglomerate merger takes place among companies which share nothing in common whereas a mixed conglomerate merger takes place between the companies which aiming at product or market extensions through the merger.
A market extension merger, as the name suggests, takes place to expand the companies’ access in the market. These types of mergers take place when two companies functioning in different market merge together in order to ensure that they get access to bigger client base.
A product extension merger takes place in order to group different companies’ products together and get access to bigger client base.
[1] https://dictionary.cambridge.org/dictionary/english/merger
