Horizontal Acquisition

Posted in Marketing and Strategy Terms, Total Reads: 2615

Definition: Horizontal Acquisition

Horizontal Acquisition is a strategy where an organization takes over or merges with another organization which:

-          Is in the same stage of production

-          Is in the same Industry

Horizontal Acquisition or Integration is basically done among competitors to create a single-firm rule (Monopoly), or few-firm rule (Oligopoly)

When two firms in the market merge to create a monopoly, it is called Horizontal Monopoly


Benefits of Horizontal Acquisition:

-          Greater market share: The market power is greatly enhanced as the companies within the same industry are combined

-          Reduced Competition: Horizontal Acquisitions are generally referred as Anticompetitive

-          Expansion in Capacity: Economies of Scale are promoted

-          Increased value than standalone companies: The value of synergy in such a case

-          Reduced operating costs

-          Higher Efficiency


-          Acquisition of 40 refineries by Standard Oil Company

-          Automobile Manufacturer acquires Sports Utility Vehicle (SUV) Manufacturer

-          Acquisition of Compaq by HP

-          Yahoo! Acquisition by Microsoft


Hence, this concludes the definition of Horizontal Acquisition along with its overview.

Browse the definition and meaning of more terms similar to Horizontal Acquisition. The Management Dictionary covers over 7000 business concepts from 6 categories. This definition and concept has been researched & authored by our Business Concepts Team members.

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