They had a significant presence in the industry through their respective agricultural divisions, Dow AgroSciences and . One of the key trends in this space, alongside consumers demanding food transparency, is the desire for convenience. Vodafone acquired a 67% stake in Hutchison Essar with the deal valued at $11.1 billion. The integration combined the first and second largest energy corporations in the United States. Banking and Financial Services: Horizontal mergers in banking and financial services can create more prominent and diversified institutions that are more competitive. Horizontal Integration: Overview and Examples - Investopedia They also have more control over pricing power in the consumer market. Instagram is now owned by Facebook but still operates independently as its own social media platform. They were also able to streamline their operations and expand their market share in the agriculture industry. HBR Learnings online leadership training helps you hone your skills with courses like Customer Focus. For Vodafone, the objective was to consolidate its position as one of the leading telecommunications companies with increased expansion in markets such as India where Hutchison had already established itself for a few years. They were able to reduce their costs by eliminating redundancies, consolidating operations, and streamlining supply chains. Horizontal Integration means acquiring activities dealing with similar products, so that synergies accrue and there is a degree of 'sensible' diversification. Think back to the Dust Bowl. ", The New York Times. Such a company may merge with a minor player in the same industry with newer variants of its own products to stay relevant or boost its growth inorganically in the industry and not get phased out. With Red Bull currently leading the energy drink category, PepsiCo hopes to gain deeper penetration into the market. A horizontal merger is a merger or business consolidation that occurs between firms that operate in the same industry, usually as larger companies attempt to create more efficient economies of scale.
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