Question

In: Finance

When a merger does not integrate the two companies’ operations, it is called a _________________.

When a merger does not integrate the two companies’ operations, it is called a _________________.

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Expert Solution

Answer)

Conglomerate merger

Conglomerate

A merger between firms that are involved in totally unrelated business activities.

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

Vertical Merger

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

Concentric merger

It refers to a combination of two or more firms which are related to each other in terms of customer groups, functions or technology.

Reverse merger

In this case, the buyer merges into the target and the shareholders of the buyer get stock in the target. This is treated as a stock acquisition by the buyer.


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