Vertical Merger

Vertical Merger
A merger between two companies producing different goods or services for one specific finished product. A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one.

In vertical mergers, by directly merging with suppliers, a company can decrease reliance and increase profitability. An example of a vertical merger is a car manufacturer purchasing a tire company. Such a vertical merger would reduce the cost of tires for the automaker and potentially expand business to supply tires to competing automakers.


Investment dictionary. . 2012.

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Look at other dictionaries:

  • vertical merger — A merger between two business firms that have a buyer seller relationship. Dictionary from West s Encyclopedia of American Law. 2005. vertical merger A merger between two business firms that have a buy …   Law dictionary

  • vertical merger — vertical merger, a merger of companies that are each other s suppliers or customers, as distinguished from a horizontal merger …   Useful english dictionary

  • Vertical merger — A merger in which one firm acquires another firm that is in the same industry but at another stage in the production cycle. For example, the firm being acquired serves as a supplier to the firm doing the acquiring. The New York Times Financial… …   Financial and business terms

  • vertical merger — When one firm acquires another firm that is in the same industry but at another stage in the production cycle. For example, the firm being acquired serves as a supplier to the firm doing the acquiring . Bloomberg Financial Dictionary * * *… …   Financial and business terms

  • vertical merger — (Economics) merger in which a company that supplies a component merges with a company that uses the component in its product (ex: computer manufacturer acquires microchip company) …   English contemporary dictionary

  • vertical merger — ver′tical merg′er n. bus the purchase by a company of a supplier or a distributor Compare horizontal merger …   From formal English to slang

  • merger — merg·er / mər jər/ n 1: the absorption of a lesser estate or interest into a greater one held by the same person compare confusion 2: the incorporation and superseding of one contract by another 3 a: the treatment (as by statute) of two offenses… …   Law dictionary

  • vertical integration — ➔ integration * * * vertical integration UK US noun [U] (also vertical amalgamation, also vertical combination) ECONOMICS, MANAGEMENT ► (also vertical merger) a …   Financial and business terms

  • merger — The fusion or absorption of one thing or right into another; generally spoken of a case where one of the subjects is of less dignity or importance than the other. Here the less important ceases to have an independent existence. Contract law. The… …   Black's law dictionary

  • merger — The fusion or absorption of one thing or right into another; generally spoken of a case where one of the subjects is of less dignity or importance than the other. Here the less important ceases to have an independent existence. Contract law. The… …   Black's law dictionary

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