Conglomerate merger

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Conglomerate merger

A merger involving two or more firms that are in unrelated businesses.

Conglomerate Merger

A merger in which the merging firms are in completely different industries. Two companies may complete a conglomerate merger for any number of reasons. Among the most prominent are the desire to expand into new markets and thereby reduce unsystematic risk and a need to eliminate redundant activities by consolidating certain departments (a process known as synergy). Pure conglomerate mergers occur when the parties have absolutely nothing in common, while mixed conglomerate mergers come from the desire of the parties to extend their markets or products. A potential drawback to a conglomerate merger is the fact that a firm may become too big and difficult to operate, resulting in inefficiency.
References in periodicals archive ?
For conglomerate mergers, changes in both types of risk are significant at 0.
In contrast, for pure conglomerate mergers, top managers of the target firm joined the new team in 24 out of the 91 cases in the same period.
This is not necessarily true for horizontal or conglomerate mergers.
Much of the early work in this area sought to explain conglomerate mergers.
Conglomerate mergers rarely raise antitrust concerns, and present no peril to competition.
Both horizontal and conglomerate mergers allow for expansion into new markets or new territories.
The premier issue includes articles on fund governance, mutual fund governance, alternative structures and strategies for investors, late trading and market timing, an overview of The Martin Act, proxy voting, theories on the rise of conglomerate mergers, and an overview of investor rights.
Primarily focusing on horizontal mergers--although discussing vertical and conglomerate mergers in cases when the producers of complementary goods are involved--the text discusses the economic modeling of mergers in a variety of contexts, ranging from simple cases where symmetric firms selling a homogeneous product have to decide how much to produce to more complicated cases, such as environments in which strategic decisions such as cost reducing investments or advertising are taken by the competing firms or mergers involving sellers of complements.
Content focuses on vertical and conglomerate mergers, enlargement of the EU and its ramifications for competition policy, unilateral and coordinated efforts in merger control, cartels and leniency and the restatement and evolution of Article 82.
4) Vertical and conglomerate mergers should be totally immune from the law, because they do not involve a combination of direct competitors; indeed, attacking such mergers would obstruct the "creation of efficiency.
Horizontal, vertical, and conglomerate mergers and acquisitions are all evaluated in chapter ten.
Content focuses on vertical and conglomerate mergers, enlargement of the EU and its ramifications for competition policy, unilateral and coordinated effects in merger control, cartels and leniency and the restatement and evolution of Article 82.