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6 Jan 2018

Why are anti-trust authorities less likely to challenge vertical mergers than horizontal mergers?

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Lelia Lubowitz
Lelia LubowitzLv2
8 Jan 2018
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Related questions

Should the anti-trust authorities stop more corparate mergers than they do? What are the pros and cons?

Horizontal and vertical mergers are two strategies that a company can use to grow a business, enter new markets, increase revenue or reduce costs. Mergers are done to give the two companies a stronger competitive advantage. These two types of mergers are alternatives to making internal investments and may help one achieve objectives in a shorter time and at a lower cost.

Both merger systems are good but a horizontal merger gives a business an advantage that can be realized for years to come. Exxon Mobil merger discussed in test 1 was a great example of a horizontal merger. In particular, Exxon Mobil increased market share quickly, Exxon and Mobil were direct competitors in at least 40 metropolitan U.S. areas in 1999, the mergers expected savings was about $2.8 billion a year and together the merger formed the third-largest company at the time. Consequently Trang behind the AOL/Time Warner Merger. In the Exxon Mobil merger, both companies bring strong assets to the relationship. Exxon and Mobil were the worlds largest oil companies, the merger allowed for higher production capacities, strong financial and operating performance, Exxon's low cost of production and Exxon's experience in deepwater exploration was a plus. Now that it has been 17 years Exxon Mobil remains the biggest oil company and the market may allow for the giant to grow even more. The merger remains one of the most highlighted not only by its size but by the fact that they were such bitter rivals. Similar to Coke and Pepsi in rivalry, Exxon and Mobil were able to make it work, eliminating each other from the competition and combining to make more money than either business would have thought possible.

Referrence:www.usatoday.com/story/money/2015/04/08/shell-bg-oil-lng-gas-merger-www.smallbusiness.chron.com/horizontal-merger-vertical-merger-60981.html

I need a peer reply for this discussion for at least 200 words.

The US Justice Department website has issued a set of guidelines for horizontal mergers. write a 200-word posting in which you identify what you believe to be the three most important points of the guidelines. Explain in your post why you believe these are important. Please write in your words.

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