Ahorizontal mergeroccurs between companies operating in the same industry. The merger is typically part of consolidation between two or more competitors offering the same products or services. Such mergers are common in industries with fewer firms, and the goal is to create a larger business with ...
Concentric Merger:This type of merger involves companies in related industries or offering complementary products or services that can benefit from combining their operations. An example would be a software company merging with a cybersecurity firm. Conglomerate Merger:Conglomerate mergers occur when two ...
Vertical mergers involve two companies in the same industry who operate in different stages of production. This could involve a retailer who merges with a wholesaler, or a wholesaler merging with a manufacturer, for example. This type of merger is ideal for streamlining operations, boosting efficien...
For example, RBC Centura’s merger with Eagle Bancshares Inc. in 2002 was a market-extension merger that helped RBC with its growing operations in the North American market. Eagle Bancshares owned Tucker Federal Bank, one of the biggest banks in Atlanta, with over 250 workers and $1.1 billion...
An example of a congeneric merger is when banking giant Citicorp merged with financial services company Travelers Group in 1998.1In a deal valued at $70 billion, the two companies joined forces to create Citigroup Inc.2While both companies were in the financial services industry, they had differen...
Types of Merger 1. Conglomerate The merging companies are not from the same line of business. A pure conglomerate consists of two distinct companies. In contrast, a mixed conglomerate involves businesses with unrelated commercial endeavors.
For example, a real estate company acquires aninsurancecompany. The main reason for this type of merger/acquisition is diversification, which helps create stability for the company. If one product or service is struggling, the hope is that other products or services will perform well and balance...
Example of a Merger and Acquisition ModelSuppose a pharmaceutical company is considering the acquisition of a biotech firm. The M&A model will take into account factors such as, the biotech company’s potential for revenue growth, the mergers and cost savings expected from the acquisition, and the...
Exxon and Mobile merger (a great example of a successful horizontal merger). But they can't all be good news stories like these… Find out the good, the bad, and the ugly, as well as the biggest deals of all time by decade:
Parent-subsidiary mergers may be upstream or downstream. A parent-subsidiary upstream merger is a merger of a subsidiary business entity into its parent business entity, with the parent business entity surviving. To simplify the procedure when there are no, or almost no minority shareholders, busine...