Conglomerate merger

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Conglomerate merger

A merger involving two or more firms that are in unrelated businesses.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Conglomerate Merger

A merger in which the merging firms are in completely different industries. Two companies may complete a conglomerate merger for any number of reasons. Among the most prominent are the desire to expand into new markets and thereby reduce unsystematic risk and a need to eliminate redundant activities by consolidating certain departments (a process known as synergy). Pure conglomerate mergers occur when the parties have absolutely nothing in common, while mixed conglomerate mergers come from the desire of the parties to extend their markets or products. A potential drawback to a conglomerate merger is the fact that a firm may become too big and difficult to operate, resulting in inefficiency.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Second, the law-study provides an analysis of the conditions under which potential competition or a particular potential competitor will be effective, which is relevant to the determination of whether conglomerate mergers that eliminate a potential competitor will tend to yield Sherman-Act-illicit profits and reduce competition on that account.
i) Mueller, D.C., The Effects of Conglomerate Mergers ...
Another explanation for conglomerate mergers is that buyers were motivated by earnings-per-share (EPS) manipulation.
The creation of EU is a result of conglomerate mergers. A long period of wars; religion, balance of power, two world wars, have influenced supremacies to compromise in the common interest.
Although conglomerate mergers and horizontal mergers have been the focus of many studies, ours is one of the few papers that examine vertical mergers.
Conglomerate mergers rarely raise antitrust concerns, and present no peril to competition.
The European Commission has adopted new guidelines to explain better to companies how the Commission will analyse the impact of so-called vertical or conglomerate mergers on competition, announced European Competition Commissioner Neelie Kroes on 28 November.
The premier issue includes articles on fund governance, mutual fund governance, alternative structures and strategies for investors, late trading and market timing, an overview of The Martin Act, proxy voting, theories on the rise of conglomerate mergers, and an overview of investor rights.
and the EC on conglomerate mergers and their anticompetitive effects.
Primarily focusing on horizontal mergers--although discussing vertical and conglomerate mergers in cases when the producers of complementary goods are involved--the text discusses the economic modeling of mergers in a variety of contexts, ranging from simple cases where symmetric firms selling a homogeneous product have to decide how much to produce to more complicated cases, such as environments in which strategic decisions such as cost reducing investments or advertising are taken by the competing firms or mergers involving sellers of complements.