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Simple English definitions for legal terms
conglomerate merger
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A quick definition of conglomerate merger:
A conglomerate merger is when two companies that are not related to each other join together. They are not competitors or customers of each other. This is different from a horizontal merger, where two companies that make similar products join together, or a vertical merger, where a company that makes a product buys a company that sells that product. In a conglomerate merger, the two companies become one big company.A more thorough explanation:
A conglomerate merger is a type of merger between unrelated businesses that are neither competitors nor customers or suppliers of each other. This type of merger involves the acquisition of a company that operates in a different industry or market. For example, a technology company acquiring a food company would be a conglomerate merger.
Other types of mergers include:
- Horizontal merger: A merger between two or more businesses that are direct competitors.
- Vertical merger: A merger between businesses occupying different levels of operation for the same product, such as between a manufacturer and a retailer.
- Product-extension merger: A merger in which the products of the acquired company are complementary to those of the acquiring company.
These examples illustrate the different types of mergers that can occur in the business world. Each type of merger has its own unique characteristics and can result in different outcomes for the companies involved.