For more than three decades, Linn Crader has been working in the mergers and acquisitions (M&A) industry. Committed to helping customers reach their long-term goals, Linn Crader offers personalized services to assist clients in their M&A transactions.
Mergers are divided into five types based on their economic function, the relationship between the companies, and the purpose of the transaction. These five types are briefly described below:
1. Horizontal. These mergers take place between companies operating in the same industry and are most common in highly competitive industries.
2. Vertical. Used for improving margins, cost efficiency, and operational efficiency, vertical mergers take place between companies that produce different goods used in a single product. The companies operate at different levels within a single supply chain.
3. Conglomerate. There are two types of conglomerate mergers: mixed and pure. Mixed mergers occur between two companies seeking market or product extensions, while pure mergers take place between companies that have nothing in common.
4. Market extension. These mergers, which help increase the size of the client base or market, occur between companies that serve different markets with the same products.
5. Product extension. Similar to market extension mergers, product extension mergers involve companies that operate within the same market and sell products that are similar but different. These mergers increase the number of products offered by a company and target a larger consumer base.