Vertical Merger

A vertical merger occurs when two companies at different stages of the production process join forces. For example, if a car manufacturer merges with a parts supplier, the car maker can secure its supply chain and potentially lower costs. This type of merger aims to improve efficiency, increase control over the production process, and enhance competitiveness. However, it can also raise regulatory concerns if it reduces competition in the market for parts or products, leading to potential price increases for consumers.