Form of Merger

Horizontal Merger

Horizontal mergers are mergers between companies that make and sell similar products. Incorporation of some banks to form Bank Mandiri is an example of horizontal mergers. Horizontal merger aims to reduce the number of firms in the industry, which will reduce the existing competition. Horizontal mergers are also performed for other reasons. Oil companies, for example, a merger to maintain oil supplies. In addition, it is cheaper to buy another oil company rather than doing their own exploration and mining for oil. 

Vertical Merger

Vertical mergers are mergers between companies that have products that are different but have similarities in the production and marketing. Usually, one of the companies that merged to become the dealer or consumer to another company.

Conglomerate Merger

Conglomerate mergers are mergers between companies that are completely unrelated. 

One example Conglomerate mergers are mergers conducted by the Xerox Corporationwho bought the Crum and Forster, an insurance company. This type of acquisition is used to expand the products produced thereby increasing the company's revenue.