Question

what is the difference between vertical and horizontal mergers?

Answer 1

Horizontal Merger (Integration) = When a company expands its business into different products that are similar to current lines.

E.G: when Mittal Steel merge with Arcelor (another steel producer)


Vertical Merger (Integration) = When a company expands its business into areas that are at different points of the same production path.

E.G: merger occurred between Time Warner Incorporated, a major cable operation, and the Turner Corporation, which produces CNN, TBS, and other programming.

Difference = Horizontal is when they merge within their own market (i.e between competitor) while Vertical is when they merge with upstream or down stream into different market (i.e their supplier or completely different market).