Integration to achieve economic gains

Another motive for merger and acquisition activity is to achieve horizontal integration. A company may decide to merge with or acquire a competitor to gain market share and increase its marketing strength.

Vertical integration is also an attraction. A company may decide to merge with or acquire a customer or a supplier to achieve at least one of the following:

• a dependable source of supply;

• the ability to demand specialized supply;

• lower costs of supply;

• improved competitive position.