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 ?
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.