What is merger?

The combination of two or more corporate houses to create a completely new venture is referred to as a "merger" in business terminology. It causes an increasing number of already-existing businesses to dissolve in order to merge with an enterprise that is considerably larger. By increasing its market share and entering new areas, the company has adopted a plan to maximise its growth.

This has led to greater customer base, decreased competition, the introduction of a new product segment, and other benefits. Conglomerate, congeneric, market extension, horizontal, and vertical mergers are the five main types. It is a strategy adopted by the company to maximise the company’s growth by expanding its market share and expanding into new segments, which results in collaboration, increased customer base, reduced competition, introduction to a new product segment, etc. 

1) CONGLOMERATE - The term "conglomerate" refers to a pair of unrelated businesses. This merger involves two or more unrelated businesses that were formerly separate entities. The managerial conglomerate, financial conglomerate, and concentric conglomerate are additional divisions of this.

2) Congeneric - It is also known as a Product extension merger; it means where two organisations operate in a common market but provide different products or services that come together for a merger.

3) Market Extension - Businesses that sell the same items yet compete in different markets merge together.

4) Horizontal - This merger occurs between companies operating in the same industry or dealing in similar lines of business.

5) Vertical  -  This occurs when organisations with a "buyer-seller connection" come together to form a new enterprise. It is the merging of two businesses that operate in the same sector but are at various stages of production and distribution.