Horizontal merger

Definition

A horizontal merger occurs when two or more companies operating in the same industry and often direct competitors decide to combine their businesses. This type of merger is aimed at achieving greater market share, reducing competition, or achieving economies of scale.

Related terms

Market Share: The portion of a market controlled by a particular company or product.

Economies of Scale: Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Antitrust Laws: Laws designed to promote fair competition for the benefit of consumers, preventing monopolies and ensuring a competitive marketplace