Vertical acquisition


Also found in: Acronyms.

Vertical acquisition

Buying or taking over a firm in the same industry in which the acquired firm and the acquiring firm represent different steps in the production process.

Vertical Acquisition

An acquisition where one company buys another company in the same industry, but at a different stage of the production cycle. A vertical acquisition can reduce the costs of the two companies by eliminating redundant processes. It also reduces reliance of one company on another. For example, an upstream oil company can merge with a downstream oil company to streamline operations.
References in periodicals archive ?
Importantly, many of these vertical acquisitions reflect semi-integration.
(218) Additionally, as shown in Table 3 below, recent vertical acquisitions by Facebook show a pattern of bringing upstream software and technical providers in-house to integrate with its social network.
(195.) For instance, in the 1980s, many large corporations sold their chemical units, thus freeing up capital for vertical acquisitions. See KING, supra note 33, at 6.
Hypothesis 3b (H3b): The number of prior vertical acquisitions by tied-to firms is positively associated with the number of current vertical acquisitions by the focal firm.
As predicted by H3b, there is a positive relationship between the number of vertical acquisitions completed by the tied-to firms and the number of vertical acquisitions completed by the focal firm.
There is no relationship between horizontal and vertical acquisitions by the tied-to firms and conglomerate acquisitions by the focal firm.