What are the four types of business combinations through mergers?

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What are the four types of business combinations through mergers?

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What are the four types of business combinations through mergers?

Explanation & AnswerSolution by a verified expert

Explanation

Based on the businesses of the acquirer and the target company, four types of business combinations through merger are-

Horizontal merger wherein one firm merges with another firm in the same line of business.
Vertical merger wherein one firm's products or services are used by the other firm.
Congeneric, where two related firms merge, neither produces the same product nor does one firm use another firm's products. The firms are in related industries or the same industry with different business lines.
Conglomerate where unrelated firms merge and produce a variety of products in different lines of business.

Verified Answer

A business can merge with another business by the way of horizontal merger, vertical merger, congeneric merger or in the form of conglomerate.

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