TYPES OF MERGER

TYPES OF MERGER

INTRODUCTION:

                                Merger means combination of two existing company and form a single company which may be a new company or one of the existing company. In merger two existing company dissolved their separate entity.

            Following are the major types of merger:

                                       

                   => Horizontal Merger.

                   => Vertical Merger.

                   => Conglomerate Merger

                   => Congeneric Merger.

                   => Reverse Merger.

HORIZONTAL MERGER;

                                             In case of horizontal merger two companies are operate in the same industry. By the horizontal merger a monopoly market situation may be created.

VERTICAL MERGER;

                                         Two companies are merged having a buyer and seller relationship between them. They operate under same industry but the level of operation is different.

CONGLOMERATE MERGERS:

                                                          This type of merger takes place between two unrelated type of business entities. In conglomerate mergers two companies are operates in different industry. This type of merger takes place due to utilization of financial resources, enlarged debt capacity and also synergy of managerial function.

CONGENERIC MERGER:

                                            In these mergers the acquiring and the target companies are related through basic technology, production processes or markets.

REVERSE MERGER:

                                    When merger takes place between private company and public company. Through the process of reverse merger a private company become public company without taking lot of legal hurdles.

      These are types of merger takes place in the business world. Due to globalization merger and acquisition takes a important role in developing country.