Business & Finance
Business Finance
Mergers and Acquisitions

What is an example of a vertical merger?

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Wiki User
December 22, 2012 5:35AM

When a bicycle company and a manufacturer of inner tubes

merge.

The one company is different from the other; however it's

product is part of the other. Depending on their relative size, a

rubber company could also buy the bicycle company as an end user of

their products.

Another one you might like: a mattress manufacturer buys

companies that make all the parts for the mattresses, a trucking

company, a chain of furniture stores and a bank. Now they can make

the raw materials, turn them into mattresses, ship them to their

own stores and loan people money to buy them. In reality the

government would break this up, but that's a vertical merger.


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