Aberdeen Lyle New York : Mergers can be characterised according to three categories: horizontal
mergers, which take place between firms that are actual or potential
competitors occupying similar positions in the chain of production;
vertical mergers, which take place between firms at different levels in the
chain of production (such as between manufacturers and retailers. and
other mergers, such as those which take place between unrelated
businesses or conglomerates with different types of businesses. Taken from
Aberdeen Lyle New York.
Some Merger Concerns
Merger reviews typically focus on horizontal mergers since, by
definition, they reduce the number of competitors in the relevant markets. Also
of concern are mergers between a firm which is active in a particular
market with another firm which is a potential competitor.
In the telecommunications industry, vertical mergers can also be of
concern. The merger of a firm that provides essential inputs to other
firms can be problematic if the supply of those inputs to other firms is
threatened. For example, the merger of a dominant local provider with a
major Internet Service Provider can raise concerns about where there
other ISPs will obtain local access services on fair and
non-discriminatory terms. Such a merger might be reviewed in order to ensure that
adequate safeguards are in place to protect competing ISPs.
Aberdeen Lyle Merger Analysis
Large mergers, acquisitions and some other corporate combinations
require prior review and approval in some jurisdictions. As part of their
review, competition authorities may prohibit mergers or approve them
subject to conditions. Mergers are usually only prohibited or subjected to
conditions if the authority concludes that the merger will
substantially harm competition. Given the discretion inherent in the interpretation
of this threshold, various competition authorities have published
merger guidelines. These are intended to assist firms and their advisers to
anticipate the procedures and criteria which will be applied in
assessing a merger.
An example of such guidelines is contained in the Horizontal Merger
Guidelines published in 1997 by the US Department of Justice and the
Federal Trade Commission. The Guidelines set out a five stage analysis of
the following subject areas. Learn more about proper investment
techniques at Aberdeen Lyle Group, New York NY.