1. (20 Points) What is a vertical merger? What is a horizontal merger? Explain why AT&T's proposed acquisition of Time Warner is vertical merger. The primary point of a vertical merger isn't to build income, but rather to enhance proficiency or lessen costs. A vertical merger happens when two organizations that beforehand sold to or purchased from each other consolidate under single proprietorship. The organizations are by and large at various phases of creation. A maker may choose to converge with a provider of critical parts or crude materials, for instance, or with a wholesaler or retailer that offers its items. Vertical mergers can help your protected access to essential supplies. They likewise help to decrease your general expenses by wiping out the expenses of discovering providers, arranging bargains and paying full market costs. Vertical mergers can enhance your …show more content…
A horizontal merger happens when two organizations offering comparable, or perfect, items or administrations to a similar market join under single proprietorship. On the off chance that the other organization offers items like yours, your joined deals give you a more noteworthy offer of the market. The fundamental point of a horizontal merger is to expand income by offering an extra scope of items to your current clients. AT&T's proposed acquisition of Time Warner is vertical merger because, the goal is to enhance proficiency and lessen costs. They want to enhance proficiency by combining the video-distribution network of AT&T with Time Warner's content. The acquisition will lessen cost since AT&T will have access to Time Warner's content, especially the Turner