2. MERGERS
A merger is an agreement that unites two existing
companies into one new company.
Merger is commonly done to expand a company’s
reach, expand into new segments, or gain market
share.
It is also done to increase shareholder value. Often,
during a merger, companies have a no-shop
clause to prevent purchases or mergers by additional
companies.
3. A merger is the voluntary fusion of two companies
on broadly equal terms into one new legal entity.
Its deals can be viewed from three different
perspectives:
o as corporate restructuring decision
o as a strategic decision
o as an investment decision.
KEY
TAKEAWAYS
5. 5 TYPES OF MERGER
1. Horizontal merger: A merger between companies that are in direct competition with
each other in terms of product lines and markets
2. Vertical merger: A merger between companies that are along the same supply chain
(e.g., a retail company in the auto parts industry merges with a company that
parts.)
3. Congeneric :A congeneric merger is also known as a Product Extension merger. In
this type, it is a combining of two or more companies that operate in the same
factors, such as technology, marketing, production processes, and research and
6. 6
4. Product-extension merger: A merger between companies in the same
markets that sell different but related products or services
5. Conglomerate merger: A merger between companies in unrelated business
activities (e.g. A conglomerate merger was formed when The Walt Disney
American Broadcasting Company (ABC) in 1995
