when two companies that produce parts or services for a product merger the union is referred to as a vertical merger a vertical merger occurs when two companies operating at different levels within the same industry s supply chain combine their operations such mergers are done to increase synergies achieved through cost reduction which results from merging with one or more supply companies one of the most well known examples of a vertical merger occurred in 2000 when internet provider america online aol combined with media conglomerate time warner 6
examples of mergersanheuser busch inbev bud is an example of how mergers work and unite companies together the company is the result of multiple mergers consolidations and market extensions in the beer market the renamed company anheuser busch inbev is the result of the mergers of three large international beverage companies interbrew belgium ambev brazil and anheuser busch united states 7ambev merged with interbrew uniting the world s third and fifth largest brewers when ambev and anheuser busch merged it united the number one and two largest brewers in the world 89 this example represents both horizontal merger and market extension as it was an industry consolidation and extended the international reach of all the combined company s brands the largest mergers in history have totaled over 100 billion each in 2000 vodafone acquired mannesmann a transaction valued at 190 billion to create the world s largest mobile telecommunications company 10 in 2000 aol and time warner vertically merged in a 164 billion deal considered one of the biggest flops ever 11 in 2014 verizon communications bought out vodafone s 45 stake in vodafone wireless the value of which was 130 billion 12