The Use Of Vertical Mergers

The use of vertical mergers do not face as much contention as horizontal merger agreements. Vertical merger agreements involving the combination of two companies that are involved in a supplier-customer relationship. Vertical mergers have the effect of foreclosing or eliminating unintegrated competitiors, increasing barriers to entry into the marketplace and limiting and affecting future competition. For these reasons, vertical mergers are also scrutinized.

The following questions have been addressed in this article:

Can a merger both have horizontal and vertical merger effects?
What has been the precedence with these mergers?
What are defenses that the acquiring company can raise to defend a merger?

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