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HORIZONTALMERGER

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What are Mergers ???In General,

"Merger is an absorption of one or

more companies by a single existingcompany."

In Finance,

"Merger is an act or process of

purchasing equity shares (ownership sharesof one or more companies by a single existingcompany.!

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ypes of Merger Horizontal Merger

# merger occurring between companies in thesame in$ustry

Vertical Merger

# merger between two companies pro$ucing

$i%erent goo$s or ser&ices for one speci'c 'nishe$pro$uct

Conglomerate Merger

# merger between the 'rm that are in&ol&e$in totally unrelate$ business acti&ities

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ori)ontal Mergerori)ontal merger is a business consoli$ation

that occurs between 'rms who operate in thesame space, often as competitors o%ering thesame goo$s or ser&ices

*xamples +ipton In$ia an$ -rooe -on$

-an of Ma$ura with I/I/I -an-0*0 t$ with 1rissa 2ower 0upply /ompany

#ssociate$ cement company t$ with 3amo$ar/ement

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2ros of ori)ontal MergerIncrease in 2lant /apacity

4tili)ation of operational expertise an$

research an$ $e&elopment(5633i&ersi'cation of pro$uct an$ ser&ice o%ering

5e$uction of 'nancial ris

arger Maret 0hare

0hare complementary sill

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/ons 1f ori)ontal

Mergers# merger can re$uce competition an$ with

the less competition the new 'rm can increaseprices for consumer

# merger can lea$ to less choice for consumer

# merger can lea$ to 7ob losses

3i8cult to integrate the culture

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5iss an$ Mitigation 2lan2oor or ina$equate communications+What is

your communication strategy, who wasin&ol&e$ in $e&elopment, an$ who will lea$ it?

a&ing two $istinct cultures an$ ser&icestan$ar$s an$ not taing time to balance an$

merge the two (eep the best of both an$ losethe worst of both

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