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Vertical Merger Case Study

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selling firms are absorbed by the buying firm” clearly gives the most simple definition of what truly merger and acquisitions is, with an attempt of defining mergers I would briefly state the consistently discussed types of mergers for which are:
Merger and Acquisition are classified into four types which can be explained below:
• Horizontal
• Vertical
• Conglomerate and
• Concentric mergers
Horizontal Merger:
This is a type of merger where a competing firm within the same industry (any by implication similar product) and same level of operation. The principal objective of horizontal merger is expansionary motive. Firms in the same line of business compete with each other for share of the market. One good example of horizontal acquisition is the acquisition as example, Standard Trust Bank merged with United Bank for Africa Plc. and Continental Trust Bank because they share the same resource. Horizontal mergers have been the most important and prevalent form of mergers in Nigeria.
Vertical Merger:
According to Lipczynski (2004: 229) “A vertical merger refers to the expansion of firms caused either by mergers between two firms involved at successive stages of the production process or by firms developing their own vertical operations”. Most firms choose a vertical …show more content…

The main objective of the reforms is to move the Nigerian economy forward and to strengthen the banking system in order to facilitate development. The first phase of the reforms is designed to ensure a diversified, strong and reliable banking sector, which will ensure the safety of depositors’ money, play active developmental roles in the Nigerian economy and become competent and competitive players both in the African and global financial systems; while the second phase involved encouraging the emergence of regional and specialized banks (Okagbue and Aliko, 2005:

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Back in October 2013 the major outdoor retailer Bass Pro Shops struck a deal to to acquire a major competitor, Cabela’s, for about $4.5 billion in cash. These are two major sellers of outdoor related gear, and they have both spent decades as competitors building over-the-top megastores. Bass Pro Shops was founded by John Morris in 1971 in Springfield, Missouri. It has since grown to roughly one hundred locations and posted revenues of $4.45 billion as late as 2015. It is a big source of employment for locals, as they have 22,000 jobs.

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Kaveena HBC essay socials 10 November.8.15 In 1821 the Hudson’s Bay Company and North West Company merged under the name of The Hudson’s Bay Company, ending years of rivalry for dominance of the fur trade. This happened because neither one of these 2 companies could grow because all their effort was put in competing with each other to be at the top rather than trying to enhance their own company’s. With this merge came a competent controller, George Simpson. He was very authoritative in everything he said and did with the company.

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1) Andrew Carnegie used vertical integration, controlling every step in the process of manufacturing a product, dominating the market. Vertical integration is when the company owns all means of distribution from beginning to end, this makes supplies more reliable and improved efficiency. It controlled the quality of the product at all stages of production. Horizontal integration was used by John D. Rockefeller and is an act of joining or consolidating with one’s competitors to create a monopoly. In Ohio in 1870 he organized the Standard Oil Company.

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1) Vertical Integration is when a company controls every step of its business from the production of its own supplies to the distribution of its product which the company avoids a middlemen. On the other hand, Horizontal Combination is when one company buys competing companies in the same industry. 2) The Dawes Act divided the land of almost all tribes into small portions that were distributed to Indian families who would adopt habits of civilized life to become American citizens. The remaining land was sold off to white purchasers.

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Even further, these robber barons would often ruthlessly eradicate competition by buying out other companies to establish monopolies through the horizontal and vertical integration of production and product.

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vertical Integration is when a single company controls the raw materials, the factories, and everything else that it takes to produce its product. He moved toward a monopoly by opening his first steel plant in 1875, investing in a coke(coal) company, buying a homestead steel

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For instance, John D. Rockefeller pursued numerous of strategies, to try to eliminate his competitors. From horizontal integration, in which he tried to buy or force his competitors out, to vertical integration, which Andrew Carnegie also practiced, meaning they eventually owned everything they needed to produce. J. Pierpont Morgan had a different strategy in an attempt to monopolize his company, he would help merge competing corporations by purchasing massive amounts of stocks and selling them at a profit. These strategies helped capitalize the entrepreneurs control in the growing

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Vertical integration is a tactic where a company, in this case Carnegie Steel Company, buys out all of the steps in the creation of a product. For example, Carnegie could acquire the materials and ship them without going through another company. This allowed him to sell his steel much cheaper than competitors who had to pay others for all the steps in production. As a result, smaller companies were put out of business, allowing Carnegie to hold a monopoly on steel. This makes capitalism seem exploitative because it uses a group of people for profit (the working class) and deprives the market of healthy

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Different corporations also used different methods to force competitors to sell their businesses to them. For example, if Rockefeller wanted to buy out a competing oil refinery, he would stop providing crude oil to them from his oil rigs until they couldn't survive as a company any longer. Another example is Cornelius Vanderbilt's railroad monopoly. If Vanderbilt wanted to buy a competing railroad line, he would buy out all the land around it to block off its path, and render it useless to the current owners. That way, the owners would have no choice but to sell the railroad to him for cheap.

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When major companies decide to merge, for example, the proposed merger will be carefully examined to ensure it will not harm the rest of

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Corporate Strategies Vertical Integration Verizon implements a value chain analysis to understand the parts of the daily operations that create value, and those parts that do not. The value chain analysis is used to determine the level of competition, the type of products and services the consumer needs, and to figure out the ways that Verizon can stay sustainable and remain the market leader in the industry. This is vital because if done correctly Verizon will be able to gain high returns within the telecommunications industry by creating greater value to the customer. Verizon breaks their value chain into primary and support activities. The primary activities are research and development, infrastructure, marketing and sales, and customer

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Once monopolies form, there is no reason they would not merge to form a multi-market conglomerate . Once collusion is common, it is likely that every business will collude in some way. In Holland, when construction companies started colluding without repercussions from the government, it was almost impossible for a construction firm to make money without being a part of the “cartel” of business who collude. “Individual construction companies that tried to stop this practice by not attending these secret meetings soon learned that their orders greatly diminished and were, therefore, forced to continue their cooperation”4. Therefore not only will there be incentives for unethical business, there will be repercussions from not partaking.

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Comcast and Time Warner Cable have recently struck a deal. The two cable companies are waiting for their merger application to be approved by the Federal Communications Commission, the government agency that regulates communications through the media. Both Comcast and Time Warner claim that this merger is more to the benefit of their consumers, increasing services provided by the companies. However, this “merger” is nothing more than a takeover by Comcast, the company trying to increase the monopoly it is becoming.

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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.

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