Vertical Merger Essay

Decent Essays
A merger is basically a deal that unites two existing companies into one company. This is usually done to expand a company’s reach, expansion into new segments or simply to gain market share. There are different types of mergers that exist as a result of the different reasons that companies might have to merge. The 5 main types include: 1. Conglomerate: nothing in common for united companies 2. A horizontal merger is a business consolidation that occurs between firms that operate in the same space, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry. Horizontal mergers help companies gain advantages over competitors. 3. Market Extension: companies sell same products but compete in different markets 4. Product Extension: add together products that go well together 5. Vertical Merger: two companies that make parts for a finished good combine - A vertical merger occurs when two companies previously selling to or buying from each other combine under one ownership. The main objective of a…show more content…
purchase of Starwood Hotels & Resorts Worldwide. This was a friendly acquisition as the target firm Starwood Hotels was in agreement of the acquisition as it will create the world’s largest hotel company .The transaction combined the Starwood’s leading lifestyle brands and international footprint with Marriott’s strong presence in the luxury and select-service tiers, as well as the convention and resort segment, creating a more comprehensive portfolio. This will offer the broader choice for guests, greater opportunities for associates and should unlock additional value for Marriott and Starwood shareholders. Combined, the companies operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide. The combined company’s pro forma fee revenue for the 12 months ended September 30, 2015 totals over $2.7
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