ipl-logo

Vertical Merger And Acquisition

910 Words4 Pages

Worldwide Business Environment has been changing speedily because of deviations in a Global Environment. Technological advancements have reformed the way of doing business. Every organization wish to be identified in worthwhile and adopt distinct strategies to compete this dynamic environment. In today’s globalized environment, organizations think Merger and Acquisition (M&A) the best tool to be competitive in the market and to intense their market share by broadening their portfolio, getting into the new markets, reducing costs and improving profitability, quick build of market presence, capitalization and other synergies. However, not every combination creates merit for the shareholders of the involved parties. Conversely, all economic sectors …show more content…

The merger is separated into different types: Horizontal, Vertical, Conglomerate and Concentric Merger. When two, identical business firms get into a merger it is defined as Horizontal Merger. Whereas two firms in a same industry deal with different stages of the production process and gets combined, such is termed as Vertical Merger. With Conglomerate Merger companies deal from two different industrial sectors and combine their operations (Mueller, 1977). Concentric Merger occurs when firms do not have an identical business, but are related to …show more content…

Mitchell and Mulherin, 1996; Brealey and Myers, 2003). First Wave dated from 1893-1904, includes many horizontal mergers within the US manufacturing and transportation industries and lasted to the World War I. Most of the merger held in this phase becomes failed because they could not reach on the desired performance. The Second Wave period was from 1916-1929 that mainly included vertical mergers within the automotive industry. In this era companies got into the backward and forward integration by supply and distribution majorly in primary producers of metals, petroleum products, transport equipment and chemicals. Third Wave (1955-1970) introduced conglomerate mergers that occurred between numerous US firms. Stock market crash in early 70’s led to the end of this wave. Highly leveraged takeover era dated from 1974-1989 and was called Forth Wave. In this era merger took place between oil and gas industry, pharmaceutical industry, banking and airline industries. This wave involved co-generic mergers, hostile takeovers, leveraged transactions and ended up with the collapse of banks. Cross-border mergers started from 1993-2000 and it was called the era of Fifth Wave. In result of globalization and the increase in competition, this era emphasized on massive transactions to get competitive advantage through size. This era was on the banking and telecom sector and ended due to

Show More
Related
155 Words | 1 Pages

America’s Gilded Age was a period of sudden economic growth and it concentrated mainly on industrialization, it lasted from 1870-1890s. The Gilded Age was when immense wealth was accumulated by a few people, such as Andrew Carnegie who dominated the steel industry and John D. Rockefeller who dominated the oil industry. These two industrial leaders were known as “robber barons” especially Rockefeller because he drove out smaller businesses and he bought out all of his oil company competitions, this type of business method he undertook is known as horizontal expansion. Carnegie on the other took a different approach, he established a steel company that was “vertically integrated, meaning he controlled more than one stage of the supply chain.

Read More
1195 Words | 5 Pages

The time between the Granger laws in 1870 and, the antitrust acts in 1900 is known as the gilded age, courtesy of Mark Twain. It was the time where business boomed and when monopolies were born. But, once looked into, these heavily influential businesses began to look more and more corrupt to the average American. These Big businesses led by so-called Robber barons, took a major part in the american economy using political corruption and bending the rules to their liking. However, the working class people didn't take kindly to such actions and formed labor unions and took political action to oppose working conditions and, political corruption.

Read More
1432 Words | 6 Pages

As shown in document A, the price of food, fuel, and lighting all dropped significantly from 1870 to 1900. This drop in price of necessary goods meant that people didn’t have to spend as much money on such items and could instead spend it on items for comfort and leisure. This lead to an increase in the quality of living across the entire country. Another way that the big businesses of the time were able to control the economy was by destroying all other competition in their respective industries. Businesses were able to do this through tactical pricing, trusts, pools, and vertical integration.

Read More
1017 Words | 5 Pages

Overall given these points Between the 1870 -1900 after the post civil war america’s corporations grew significantly in number and

Read More
1473 Words | 6 Pages

Greedy Robber Barons monopolized the American economy through horizontal and vertical integrations, driving competitors out of business. J.D. Rockefeller, founder of the Standard Oil Company and one of the richest Americans to ever live, portrayed a classic example of merging other companies to eliminate competition. Maury Klein, the author of The Genesis of Industrial America, explains that “In horizontal integration companies moved to absorb direct competitors. Rockefeller’s first stage of expansion was to acquire all the other oil refineries in Cleveland” (Klein 126).

Read More
990 Words | 4 Pages

Monopolies: The Trailblazers of America The second industrial revolution, spanning from the late 1800s to the early 1900s, was distinguished by rapid industrialization, economic upheaval, and the development of large monopolies. Small groups had total control of these monopolies and varied from many industries, the most well-known being oil, steel, and railroads. Although these monopolies had their faults, they have left a legacy on the American nation that has influenced almost every aspect of the United States today. These benefits include the growth of infrastructure on a national scale, the advancement of technology and innovation, and the cultivation of new business practices.

Read More
877 Words | 4 Pages

Its important to know about the other company and check about the opportunities. Sometimes merging or acquiring a wrong company would create heavy losses. Merger is when two individual companies combine their assets and liabilities and form an entirely new company. Acquisition is when a company takes over or purchases an another company with the view to expand or diversify its operations. Its mostly that large companies take over the smaller ones but there are instances where the smaller company takes over the larger one (Akbar D. Y., Global Strategy - mergers and acquisitions, 2015

Read More
1162 Words | 5 Pages

Andrew Carnegie, a Scottish immigrant who was a self made man, had changed the way the economy produced its wealth forever. After creating a way to “revolutionize steel production in the United states”, the cost of doing things like making factories, goods, and transportation became a lot cheaper (Andrew Carnegie Biography). The birth of railroad companies took over the majority of the economy during the late 1800’s just after Carnegie found a way to make the mass production of steel. The railroad industry influenced many things throughout the country like the growth of towns and transportation of raw goods and finished products to the factories and consumers. The practice of vertical integration, growth through the acquisition of the materials the make the product, allowed big business to control all aspects of their company instead of paying a supplier their profit margin to do a task (Document A).

Read More
879 Words | 4 Pages

Big Business (Monopolies) and Exploitation of Workers From 1870 to the 1900s it was an exciting time. Industrialization, the Gilded Age, and the Progressive era were all within this time. Everything that was happening at the time revolved around big business aka monopolies. Monopolies changed the economy and the generalized way of life for all American citizens.

Read More
1299 Words | 6 Pages

The panic of 1893 was the all time low of this time period. In the 1890’s the railroad business had reached an all time high, the onset of steel and iron, the need for oil to run these trains. All businesses were intertwined with the railroads, but soon the industry began to slow. By the end of 1893, seventy-four railroads, six hundred banks, and fifteen-thousand businesses began to shut down. With the massive shut down of businesses, unemployment sky-rocketed to nearly twenty-five percent.

Read More
2272 Words | 10 Pages

Question 1 Several factors have been proposed as providing a rationale for mergers. Among the more prominent ones are (I) tax considerations, (2) diversification, (3) control, (4) purchase of assets below replacement cost, and (5) synergy. From the standpoint of society, which of these reasons are justifiable? Which are not?

Read More
310 Words | 2 Pages

Many corporations began to increase wildly across the west. The railroad development began to take hold as well. The

Read More
1296 Words | 6 Pages

Towards the end of the “Roaring Twenties,” companies were entering their

Read More
713 Words | 3 Pages

Many mergers tend to fail and many others succeed. A merger is the combining of assets and operations, usually between two similar sized companies, in an agreement to join together. Mergers can cause bankruptcy, job losses, less choices, and even a breakup. On the other hand, they have many advantages such as, increased market share, lower cost of production, and higher competitiveness. Most mergers can be highly risky but with the presence of knowledge and intuition they can be successful.

Read More
1954 Words | 8 Pages

Mergers and Acquisitions and Shareholder Wealth: The theory of finance states that maximization of shareholder wealth should be the goal of every business organization. It is not clear, however, whether maximization of shareholder wealth is the main motivation behind Mergers and acquisitions. This has generated a lot of research interest the area. Unfortunately decades of intensive research have not been able to conclusively establish the impact of Mergers and acquisitions on shareholder wealth.

Read More

More about Vertical Merger And Acquisition

Related Topics

Open Document