A Horizontal merger is a merger between firms that produce and sell the same products, i.e., between competing firms. Horizontal mergers, if significant in size, can reduce competition in a market and are often reviewed by competition authorities.

What is an example of a horizontal merger?

A merger between Coca-Cola and the Pepsi beverage division, for example, would be horizontal in nature. The goal of a horizontal merger is to create a new, larger organization with more market share.

What is horizontal merger and vertical merger?

A horizontal merger occurs when two competing companies join together to form a single company, whereas a vertical merger occurs when two companies in different stages of production join together to form a single company. Horizontal mergers are performed to reduce competition.