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Article: Vertical Merger
- Article from:
- West's Encyclopedia of American Law
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VERTICAL MERGER
A merger between two business firms that have a buyer-seller relationship.
Business mergers can take two forms: horizontal and vertical. In a
horizontal merger
, one firm acquires another firm that produces and sells an identical or similar product in the same geographic area. This type of merger eliminates competition between the two firms. In a
vertical merger
, one firm acquires either a customer or a supplier. Because horizontal mergers pose a direct threat to competition, they have been regulated more aggressively by the federal government than vertical mergers. Nevertheless, vertical mergers may, in some circumstances, be anticompetitive and violate federal ...