Should You Choose Horizontal or Vertical M&A?

In mergers and acquisitions (M&A), selecting a horizontal M&A or vertical M&A strategy depends on a company’s business objectives and growth strategy.

🔹 Horizontal M&A occurs when a company merges with or acquires another business in the same industry. This is like assembling the best players into one team—expanding market share, strengthening competitive position, and leveraging economies of scale. However, companies must comply with strict legal regulations regarding competition and antitrust laws.

🔹 Vertical M&A happens when a company acquires businesses along its supply chain—ranging from production and distribution to sales. This enables full control over operations, cost optimization, greater supply chain autonomy, and improved efficiency. However, it requires strong management capabilities across multiple business areas.

👉 Choosing the right strategy depends on your core business goals:

✔ If your goal is to expand market share and enhance competitiveness, horizontal M&A is the optimal solution.

✔ If your focus is on controlling the supply chain, reducing costs, and increasing efficiency, vertical M&A is the strategic choice.

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