Also found in: Acronyms.
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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
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