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Mergers and Government Intervention

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What are the differences among horizontal, vertical, and conglomerate mergers? What are real-world examples of each type of merger. What policy do you think the US should follow toward mergers? Why?

What effect does government intervention, taxation, and regulations have on economic behaviour? What are real-world examples of government intervention, taxation, and regulations? What are the goals of each?

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What are the differences among horizontal, vertical, and conglomerate mergers? What are real-world examples of each type of merger. What policy do you think the US should follow toward mergers? Why?

Horizontal mergers take place between companies in the same industry. These companies are rivals who sell the same goods or services. When a merger takes place, a rival is eliminated and potential for gains become higher. A vertical merger is one in which a firm or company combines with a supplier or distributor. For example, if a car making firm is receiving chassis from two suppliers and decides to acquire them, it is a vertical merger. On the other hand conglomerate mergers are those between firms that are in unrelated business activities. The purpose of conglomerate merger is to diversify and reduce risk. A real world example of a horizontal merger is Chrysler and Diamler-Benz AG. Both companies were in the same industry when the merger took place. A real world example of a ...

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Hatim Baxamusa, MBA
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  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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