Mergers

Lesson - 13 CATEGORIES OF MERGER The following is the broad classification of jointures: (a) horizontal merger This class of merger is a merger among business competitors who ar bring into beings or distributors of the corresponding type of products or who render similar or same type of serve for profit. It involves joining to chafeher of ii or more companies which are producing essentially the same products or rendering same or similar services or their products and services directly compete in the market with each other. It is a combination of two or more firms in similar type of exertion/distribution line of business. Horizontal mergers result in a reduction in the bend of competing companies in an pains, increase the field for economies of scale and elimination of duplicate facilities. However, their main drawback, is that they promote noncompetitive trend in the industrial sector as the number of firms in an industry is decreased and this may make it easier for the industry members to collude for monopoly profits. (b) Vertical merger Vertical mergers occur between firms in different stages of production operation. In a plumb merger two or more companies which are complementary to each other e.g.

one of companies is engaged in the manufacture of a special product and the other is established and near in the marketing of that product or is engaged in production of raw material or ancillary items apply by the other company in manufacturing or compendium the final and finished product join together. In this merger the two companies merge and control the production and marketing of the same product. Vertical merger may take the form of transport or backward merger. When a company combines with the supplier of material, it is called a backward merger and where it combines with the customer, it is known as forward merger. A vertical merger may result into a glow and efficient flow of production and distribution of a particular product and reduction in handling and... If you want to get a full essay, order it on our website: Ordercustompaper.com

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