Horizontal acquisition

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Horizontal acquisition

Merger between two companies producing similar goods or services.

Horizontal Acquisition

The acquisition of one company by another in the same or a similar industry. This is often a part of the market consolidation process, when too many companies exist for the market to support. They then acquire each other in order to create fewer companies that are more competitive. In venture capital, horizontal acquisitions and horizontal mergers may be part of a roll up process.
References in periodicals archive ?
Capron, Laurence, "The Long-Term Performance of Horizontal Acquisitions," Strategic Management Journal, 1999; 20 (11), 987-1018.
Capron, Laurence, Pierre Dussauge, and Will Mitchell, "Resource Redeployment Following Horizontal Acquisitions in Europe and North America, 1988-1992," Strategic Management Journal, 1998; 19 (7), 631-61.
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.
The long-term performance of horizontal acquisitions, Strategic Management Journal, 20(11), 987-1018.
We're more into making horizontal acquisitions that support broader initiatives.
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).
Horizontal acquisitions 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.
Accordingly, we should see a relationship between the type of acquisition (horizontal, vertical, or conglomerate) completed by the tied-to and focal firms: Hypothesis 3a (H3a): The number of prior horizontal acquisitions by tied-to firms is positively associated with the number of current horizontal acquisitions by the focal firm.
Horizontal acquisitions, where similar companies serving the same market merge, are more likely to raise competition concerns.
Management expects that future horizontal acquisitions should increase its average gross revenue per installation from the current average of $30,000 to over $100,000.
These acquisitions reflect the strategy outlined when we formed the company to grow our business annually by 20% through vertical and horizontal acquisitions as well as through internal growth and we continue to be on target to do so.