Vertical and Horizontal Mergers

  • This topic has 4 replies, 5 voices, and was last updated 1 year ago by Fahad Al Sulaim.
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  • #36410
    Fahad Al Sulaim
    Participant

    what is the difference between vertical merger and horizontal merger? which one is most likely to fail?

    #39244
    Bander Dhubaiban
    Participant

    Vertical merger is integrating with a company in the same supply chain. On the other hand, horizontal merger is essentially a company acquiring a competitor.

    #39245
    Fahad Aziz
    Participant

    Vertical is most likely to fail in most cases acquirer is moving out of their business therefore may not lead to economies of scale and in some instances could also lead to diseconomies of scale (for entire value chain to operate efficiently in sync).

    #39321
    Moazzam Khawaja
    Participant

    Horizontal merger = one business acquiring another business e.g. a competitor
    Vertical merger = one business acquiring another in the same supply chain.

    Both have equal chances of failure if not planned or executed properly.

    #39322
    Austin Poff
    Participant

    In my experience, vertical mergers are easier to integrate because the companies have often already worked with each other as one is a supplier for the other. They already have some familiarity with how each other operate.

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