We conclude that to the extent the empirical evidence warrants the conclusion that large scale horizontal acquisitions threaten reduced product output and higher prices, the existing tools of antitrust merger enforcement are sufficient to support challenges to those acquisitions.
The two firms are not competitors, so no horizontal acquisition exists.
To increase organizational strength and value, many healthcare leaders are pursuing both vertical and horizontal acquisitions
that capitalize on shared functions, services, technologies, geographic footprints, specialties, customers, etc.
[7.] Capron, Laurence, "The Long-Term Performance of Horizontal Acquisitions
," Strategic Management Journal, 1999; 20 (11), 987-1018.
While research on horizontal acquisitions
tend to pay more attention on cost-based synergies and argue for the better benefits of related mergers compared to unrelated mergers, unrelated merger integration also has potential to bring about synergies and long-term benefits for the acquiring firms.
We're more into making horizontal acquisitions
that support broader initiatives.
The industry averaged 0.94 joint ventures per firm a year (alliance intensity), 3.60% of sales invested in new capital equipment, 7.43 horizontal acquisitions
, 100 million tons in domestic shipment and capacity utilization (76.71%) per year between 1977 and 1997.
Recognizing that preparation is imperative to any successful M&A process, financial managers should start the review process early through what we call "boiling the ocean." In other words, they should evaluate all strategic merger and acquisition options available, conduct a thorough analysis of every company within the industry and beyond, looking at vertical and horizontal acquisitions
, evaluating those options, reviewing potential consequences, preparing the company to initiate merger discussions with target companies, or responding to the overtures of potential acquirers.
Whereas market dominance at the century's start - in oil and tobacco, for example - was sustained by scale economies (prompted by add-on or horizontal acquisitions
that consolidated an industry platform), dominance at the century's end relies heavily on the perceived differentiation of brand names like AT&T, IBM, and Microsoft (or Intel inside).
While value creation is most closely associated with the origination function, a number of top-30 participants have incorporated vertical and horizontal acquisitions
to reduce the unknowns of value creation.
In 1950, the Clayton Act of 1914 was amended to close loopholes in preventing horizontal acquisitions
. From 1950 to 1980, major horizontal acquisitions
were prohibited by the antitrust authorities.
occur when firms acquire their competitors, vertical acquisitions occur when firms acquire their suppliers or distributors, and conglomerate acquisitions occur when firms acquire unrelated firms.