when everything goes to plan horizontal mergers can enable the new entity to gain an edge over the competition and potentially wipe some of it out 
horizontal mergers often don t live up to expectations merging two different corporate cultures can be difficult and projections may end up being overambitious horizontal merger vs vertical mergerthe main objective of a vertical merger is to improve a company s efficiency or reduce costs a vertical merger occurs when two companies previously selling to or buying from each other combine under one ownership the businesses are typically at different stages of production for example a manufacturer might merge with a distributor selling its products a vertical merger can help secure access to important supplies and reduce overall costs by eliminating the need for finding suppliers negotiating deals and paying full market prices a vertical merger can improve efficiency by synchronizing production and supply between the two companies and assuring the availability of needed items when companies combine in a vertical merger competitors may face difficulty obtaining important supplies example of horizontal merger and vertical mergerone example of a horizontal merger is hp s merger with compaq the rationale behind this deal was to bolster product lines and market share and have a greater chance of competing with the likes of dell another high profile horizontal merger was exon s tie up with mobil together they became an oil giant capable of cutting costs and squeezing the competition in january 2022 microsoft announced the acquisition of activision blizzard the acquisition enabled microsoft owner of the successful xbox brand to reap the benefits of providing exclusive content to video gamers 1much like a manufacturer acquiring a supplier satya nadella stated that microsoft was investing in activision blizzard to usher in a new era of gaming that puts players and creators first and makes gaming safe inclusive and accessible to all 1special considerationsnot all proposed mergers go through sometimes regulators will put the brakes on the deal and refuse to give it clearance because it is deemed to have a negative impact on consumers a key concern about horizontal mergers is that they reduce the number of choices available to consumers competition is generally seen as a good thing it helps keep prices down and encourages companies to innovate and focus on quality horizontal mergers may lead to fewer options for consumers to choose from mergers tend to get investors excited if they go to plan significant competitive advantages can be realized that promise can lead investors to overlook the complications the reality is that most mergers 70 to 90 according to harvard business review fail to achieve their expected value 2