4 Types of Mergers – What Are They?

21jun3-1

Corporate mergers are complex transactions, regardless of the size of the businesses that enter the deal. And like any complex transaction, these deals can also be categorized from various aspects. M&A advisors, iKadre – https://ikadre.com/, explain that there are four main types of mergers:

  • A horizontal merger – When two companies, similar in size and product range, merge, it is called a horizontal merger. The goal of these transactions is to expand their range of products without having to engage in developing anything entirely new;
  • A vertical merger occurs when two companies are in the same industry but handle different activities deciding to merge; the transaction is called a vertical merger. A good example is a retail company that merges with a manufacturer that produces the retailer’s main or most popular product;
  • A conglomerate merger – the term is used for deals when two large companies from different industries join forces to increase their market share in both sectors;
  • A concentric merger – in this type of merger, two companies that share customers but provide different products or services join to form a new business entity.

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