The three main types of merger are horizontal mergers which increase market share, vertical mergers which exploit existing synergies and concentric mergers which expand the product offering.
Types of Mergers and Acquisitions
There are a number of different types of mergers and acquisitions. However, there are some which are the most common.
Conglomerate Merger
These types of mergers happen between companies that have completely unrelated sets of business activities. Usually, there are two kinds of conglomerate mergers – fixed and pure. Pure mergers happen between firms which have nothing in common while fixed mergers happen between firms which are looking to expand in a particular market or product.
A live example of this can be seen in the Walt Disney and American Broadcasting Company merger.
Horizontal Merger
This merger happens between firms that are present in the same industry. It is a consolidation where the companies operate in the same space as competitors. These acquisition types are most common in markets where there is higher competition and it would make business sense to combine two companies and become a bigger force.
An example of this can be seen in the $81 billion acquisition of Mobil by the Exxon group.
Vertical Merger
These types of business takeovers happen between companies that provide different services or raw material for one finished product. You can see it as a merger between two firms that operate at different stages in one supply chain. The most common logic between these M&A is to better the synergies and cutting the cost down in the supply chain.
An example of this can be seen in IKEA’s acquisition of the Romanian Baltic Forests.
Market extension mergers
This type of mergers happen between two firms which deal in one product but in completely different markets. The main objective behind this merger type as you must have guessed is to ensure that the merging companies get better access to a bigger market and in turn a much larger client base.
An example of this is the 2002 acquisition of Eagle Bancshares Inc by RBC Centura Inc. – a subsidiary of the Royal Bank of Canada.
This type of mergers happen between firms, operating in the same market, which deal in products that are related to each other. This merger enables the companies to merge their product and get direct access to a large client base, thus increasing the probability of higher revenue.
An example of this merger type can be seen in the acquisition of Mobilink Telecom Inc by Broadcom.
Congeneric mergers
Also known as concentric merger is a twisted version of the horizontal merger. In these acquisition types, the two firms have separate service and product lines but they serve the same industry. This alignment between these companies creates a synergy where they become a bigger firm with combined abilities.
An example of this merger type can be seen in the acquisition of E*Trade by Morgan Stanley.
SPAC-Merger
It is one of the lesser seen mergers in the business world. Here, a private company acquires a public firm to gain an upper hand when going public. This merger type prevents them from taking the costly IPO route. This can also happen when a public company acquires a private firm.
An example of reverse takeover can be seen in the acquisition of the US Airways by the America West.
Acqui hiring
We are living in a period where big companies are making their mark with the help of their intellectual properties and talent. Acqui-hire is a merger type where a company acquires another firm purely to get control over their talent. This type is most commonly seen in the technology industry where there is usually a shortage of good developers.
One example of this can be seen in the acquisition of Drop.io by Facebook.
So here were the eight different types of merger and acquisition most active in the business world today. We hope you must have gotten an idea of which would be the best route for your business as you look to expand.
Horizontal, Vertical, and Concentric Mergers
Horizontal, Vertical, and Concentric Mergers
RBI & Union Cabinet
Mergers & Acquisitions is the strategy, management and financing of combining separate corporate entities into one. A merger is made of companies with similar sizes. An acquisition occurs when a larger company purchases a smaller company. Mergers & Acquisitions are financed by cash or stock.
1) MG and Rover's merge 2) Citibank and Traveler's merger = "Citigroup. 3) Airtouch + Vodafone's merger = "Verizon" -- actually worked out OK for both companies.
Some examples of corporate actions are: Voluntary, Mandatory and Mandatory with Corporation Choice actions. These have to take into consideration their stock and share holders so that they get the best dividend back for their investment.
They do not usually lessen competition in the marketplace
RBI & Union Cabinet
maruti suzuki;nokia airtel
Bank acquisition and merger in nigeria
Mergers & Acquisitions is the strategy, management and financing of combining separate corporate entities into one. A merger is made of companies with similar sizes. An acquisition occurs when a larger company purchases a smaller company. Mergers & Acquisitions are financed by cash or stock.
Blue Stragglers!
Corporate level strategy is apprehensive with the strategic decisions a company makes that have an effect on the whole business. Financial performance, Mergers and Acquisitions, human resource management and the distribution of resources are well thought-out element of corporate level strategy.
The goal of Linklaters consulting company is to provide customers with risk assessment across mergers and more. They are known as one of the best global law firms for corporate mergers and company protection.
Robert Wieder is an ally for international businesses as they grow and operate. He advises on corporate finance, mergers and acquisitions, and general corporate matters throughout Europe, the Middle East and beyond.
The four example of corporate hospitality events is 1.industry conferences 2.sport events 3.company annual dinner 4.corporate presentation
Walt Disney Company and the American Broadcasting Company.
High-profile pension-fund mergers occurred between SBC Communications and Ameritech Corporation, resulting in the fifth-largest corporate fund, as well as between BP America and Amoco Corp
A corporate solicitor handles Mergers & Acquisitions, Partnership Agreements, Corporate Incorporation, Securities Regulation, Mutual Fund Regulation and Taxation. They also handle Compliance and Regulatory issues for a company.