vertical merger


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ver′tical merg′er


n.
the purchase by a company of a supplier or a distributor. Compare horizontal merger.
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The Justice Department's merger guidelines don't rule out divestitures in vertical merger cases, but suggest that "tailored conduct remedies" can protect consumers "while still allowing the efficiencies that may come from the merger to be realised".
This is a classic vertical merger, combining of two companies that do not compete with each other,'' he said.
Thus, although (not surprisingly) the specific-anticompetitive-intent test of illegality is properly applied (1) to an individual actor's pricing-technique or sales-policy choices, (2) to one or more vertical agreements into which an individual actor enters with independent distributors or suppliers, (3) in the rare instance in which two or more rivals agree to enter into parallel vertical agreements, to the agreement they made, and (4) to an individual vertical merger, acquisition, or joint venture, the lessening-competition test is properly applied to a rule allowing all members of a set of rivals to engage in a covered category of vertical conduct.
Cultural integration may not be necessary or even advisable in a vertical merger, in which the acquirer hopes to gain access to key resources of the target company (such as a coffee retailer buying a coffee-growing firm in another country), or when a company purchases a downstream distribution outlet (such as a plastics manufacturer purchasing a container store where many of its products are sold).
Abnormal returns for vertical merger announcements are positive until the late 1990s, and turn negative afterward.
As the results of a vertical merger, successive activities in a value chain which has been conducted by different firms are brought in-house in a single firm.
Over the last few decades, horizontal and vertical merger activities in the agricultural biotechnology and seed industries have contributed to the development of a concentrated and complex industry (Fernandez-Cornejo, 2004).
This is the reason why antitrust agencies are less likely to contest a vertical merger than a horizontal merger.
For the vertical merger sample only one variable was significant--dividend policy (Meador et al, 1996).
This transaction, specifies the Commission, raises some issues similar to another vertical merger involving the proposed acquisition of Tele Atlas by TomTom NV, a Dutch company manufacturing portable navigation devices and selling navigation software for mobile phones.
Systems competition, vertical merger and foreclosure.
Remarkably, a vertical merger of two firms that have sequential market power is expected to increase profit and lower price even if there are no production efficiencies at all.