There are four types of mergers, which are presented below:
Conglomerate merger – acquisition of businesses in different lines of business to diversify risk.
Congeneric merger – acquisition of company in the same general industry to cross-sell products and services. It can be further subdivided into:
a. Market-extension merger – which refers to acquisition of company which operates in different market.
b. Product-extension merger – which involves acquisition of company that operate within same market but which product and service mix is different but related to that of the acquiring company.
Horizontal merger – acquisition of company in the same line of business which operates in the same market. This refers to acquisition of the direct competitor.
Vertical merger – acquisition of a supplier or customer.