Question
Differentiate between horizontal merger and vertical merger.
| S. No. |
Basis
|
Horizontal merger
|
Vertical merger
|
| i. |
Meaning
|
This merger is between competitors offering the same goods or services.
|
This merger is between companies producing different goods or services for one specific finished product.
|
| ii. |
Motive
|
To eliminate competition.
|
To ensure uninterrupted flow of supplies.
|
| iii. |
Example
|
A merger between Tata Motors and Hyundai.
|
A merger between Tata Motors and MRF Tyres.
|
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| No. of customers | Per customer billed amount ₹ |
| 15 | 370 |
| 20 | 430 |
| 45 | 500 |
| 25 | 1,000 |
| 95 | 1,200 |