Question

a) Differentiate horizontal merger from congeneric merger with suitable example.

Answer 1

Horizontal merger is a kind of merger in which businesses are merging who are operating in same industry and competition tends to be higher among these companies operating in same industry and hence synergies and gaines in market share are very high when merger happens through horizontal Merger.

Co generic merger is merger where acquiring company and the target company are in same or related industry and they have different business line or product and they will be sharing similar production process distribution channel and marketing.

when there would be a merger between coca cola and Pepsico, it will mean that it is an example of horizontal merger because they are working in same industries and same products making also.

When Walmart will be acquiring the Flipkart, it will mean that it is an extension of retail business into a product delivery line so, it is an example of co genericgeneric Merger.