How horizontal mergers work. Horizontal mergers work on the basis that two companies that produce nearly identical products stand to gain from the benefits of scale that come when they merge. In the most successful cases of horizontal mergers, this means that extra value can be generated at every part of the company’s value chain, from the supply chain where the bigger company can avail of bigger discounts, right through to the customer, where it now has a much larger customer base.
What is a real life example of a vertical merger?
What are some examples of a vertical mergers?
- Apple [ 1] controls design, manufacturing, distribution and software development of its products
- Netflix [ 2] became its own producer of movies and content
- Under Armour [ 3] purchased MapMyFitness, a leading workout and exercise tracking platform, in November 2013. ...
- MacDonalds [ 4] is its own supplier and landlord
What do horizontal mergers involve?
key takeaways
- Horizontal mergers occur when companies of the same industry merge.
- They often result in a way to eliminate competition by creating one powerful company instead of two competitors.
- Horizontal mergers can greatly increase revenues, as the combined companies have access to a greater variety of products or services.
What company is an example of horizontal integration?
Horizontal integration examples range across industries and include Arcelor and Mittal, Disney and Pixar and Facebook and Instagram. Horizontal integration occurs when a company increases its production, whether of goods or of services, usually by a merger or acquisition, or by internal growth.
What does horizontal merger mean?
What Does Horizontal Merger Mean? What Does Horizontal Merger Mean? A horizontal merger is the merging of companies that operate in the same industry (often competitors), creating economies of scale.
What is horizontal merger with an example?
Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry. A merger between Coca-Cola and the Pepsi beverage division, for example, would be horizontal in nature.
What is horizontal integration and how did it work?
Horizontal integration involves buying competitor companies within the same industry that are similar in size. Buying out the competition not only creates a larger company or conglomerate, but creates economies of scale, increases market power among suppliers and distributors, and opens up new markets for the company.
Why do companies do horizontal mergers?
A horizontal merger occurs when companies operating in the same or similar industry combine together. The purpose of a horizontal merger is to more efficiently utilize economies of scale, increase market power, and exploit cost-based and revenue-based synergies.
What is horizontal integration the process of merging?
Horizontal integration occurs when similar companies merge in the same stage of a supply chain merge. As opposed to a vertical integration which helps a company shift to earlier or later in the supply chain, horizontal integration further solidifies a company's current position along a manufacturing process.
Are horizontal mergers good or bad?
Horizontal integration can have general disadvantages, like the overall costs of doing a merger or takeover and the reduction in flexibility, as merging companies tend to have a monopoly over other companies in their industry, but one of the biggest disadvantages actually comes down to the decreased value of the ...
What are the two ways in doing horizontal integration?
Horizontal Integration is a strategy that a company adapts when it seeks to offer its products or services in different markets in order to strengthen its position in the industry. This can be done by either merging with or acquiring another company that produces or offers the same services.
Do consumers benefit from horizontal mergers?
The most obvious benefit is an increased market share or market power. When the two companies merge, they also combine the product base, technology, and services that are available on the market. With more products under one name, the new company can increase its foothold among consumers.
Are horizontal mergers illegal?
The law bars mergers when the effect "may be substantially to lessen competition or to tend to create a monopoly." Three basic kinds of mergers may have this effect: horizontal mergers, which involve two competitors; vertical mergers, which involve firms in a buyer-seller relationship; and potential competition mergers ...
What companies are horizontal merger?
Examples of Horizontal MergerIntegration of Facebook, Whatsapp, Instagram & Messenger. This is one of the best examples of horizontal mergers of present times. ... Frito Lay & Uncle Chipps. ... Pepsi Co & Rockstar. ... T-Mobile & Sprint. ... Disney + & Hotstar.
What is a horizontal strategy?
Horizontal integration strategy is when a business acquires a related business that occupies the same stage of the value chain and provides a similar type of value as the business. The acquired business does not have to be a direct competitor.
Why it is called horizontal integration?
Horizontal integration is when a business grows by acquiring a similar company in their industry at the same point of the supply chain. Vertical integration is when a business expands by acquiring another company that operates before or after them in the supply chain.
What is the horizontal growth strategy?
Horizontal growth typically means expanding the product or service to new markets, be it new geographies or business domains. By scaling horizontally, you might face additional challenges, unique to the markets you are targeting. This might be product localization issues or industry-specific business aspects.
How did Rockefeller use horizontal integration?
Horizontal integration enabled Rockefeller to gain tremendous control over the oil industry and use that power to influence vendors and competitors. For example, he could pressure railroads into giving him lower rates because of the volume of his products.
What is horizontal integration quizlet?
Horizontal: Horizontal integration (also known as lateral integration) simply means a strategy to increase your market share by taking over a similar company. This take over / merger / buyout can be done in the same geography or probably in other countries to increase your reach.
When was horizontal integration first used?
Horizontal integration is the business practice in the 19th century that is known as “monopolizing.” In this practice, a business completely operates one part of industry. The 19th century prime example of this is John D. Rockefeller's oil industry.
What is the benefits of horizontal integration?
Undergoing horizontal integration can benefit companies and typically takes place when they are competing in the same industry. The advantages include increasing market share, reducing competition, and creating economies of scale.
How does horizontal merger help a company?
Horizontal Merger also will help the merged entity to control its expense ratio since the combined expenses of both the companies, along with the combined revenues, will surely lower down the expense ratio and improve the financial performance of the company.
What is horizontal merger?
Horizontal merger refers to the merger that occurs between the organizations that operate in the same or similar industries and generally the competitors in the industry opt for such type of mergers for reasons such as to increase the share in the market, to bring economies of scale, to reduce the level of competition, ...
What are the Issues Faced in the Horizontal Merger?
Cultural Integration difficulties: Cultural issues are usually faced in all types of mergers but are especially evident in horizontal mergers. Since the 2 companies operate in similar or the same industry, they both have similar processes and functions, but might have different ways of handling things. Thus, the diverse cultures of the two companies further make it difficult for them to co-exist.
Why do companies merge horizontally?
In this example, there can be a horizontal merger between these two companies in order to create synergy and increase the revenues and market shares of the group.
What are some examples of horizontal mergers?
A hypothetical example of a horizontal merger may be of Hindustan Unilever and Patanjali. Though both of them operate in the FMCG market, both of them have different product ranges aimed at different demographics of people. Thus, the merger may help them to offer a wider range of products, will increase their revenue substantially, ...
What is merger in business?
A merger is an inorganic method of growth for a company. When two companies providing same/similar products or services having their individual market share and audience in the market combine to become a single entity, it leads to an increase in market share and thus increases in revenue.
Why do companies merge?
Companies go for a merger for many reasons, both financial and non-financial. These mergers are usually considered for non-financial reasons. However, these type of mergers is more closely monitored by the government since it may lead to a decrease in competition in the industry and may also to oligopoly.
How does a horizontal merger help a company?
A horizontal merger can help a company gain competitive advantages. For example, if one company sells products similar to the other, the combined sales of a horizontal merger will give the new company a greater share of the market. If one company manufactures products complementary to the other, the newly merged company may offer a wider range ...
What is horizontal merger?
A horizontal merger is when companies of the same industry merge. Horizontal mergers often result in a way to eliminate competition by creating one powerful company instead of two competitors. Horizontal mergers can greatly increase revenues, as the combined companies have access to a greater variety of products or services.
How does a horizontal merger increase revenue?
A horizontal merger can increase a company’s revenue by offering an additional range of products to existing customers. The business may be able to sell to different geographical territories if one of the pre-merger companies has distribution facilities or customers in areas not covered by the other company.
Why do vertical mergers occur?
This type of merger occurs frequently because of larger companies attempting to create more efficient economies of scale. Conversely, a vertical merger takes place when firms from different parts of the supply chain consolidate to make the production process more efficient or cost-effective. 1:06.
What is the purpose of vertical merger?
The main objective of a vertical merger is to improve a company’s efficiency or reducing 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.
Why do companies merge horizontally?
A horizontal merger also helps reduce the threat of competition in the marketplace. In addition, the newly created company may have greater resources and market share than its competitors, letting the business exercise greater control over pricing.
What happens when a company merges with another company?
If one company manufactures products complementary to the other, the newly merged company may offer a wider range of products to customers. Merging with a company offering different products to a different sector of the marketplace helps the new company diversify its offerings and enter new markets.
How do horizontal mergers work?
Horizontal mergers work on the basis that two companies that produce nearly identical products stand to gain from the benefits of scale that come when they merge.
What is a horizontal merger?
In simple terms, a horizontal merger is when two companies in the same industry (meaning they sell similar products/services in the market) come together. The larger thinking behind this type of merger is that the companies together are worth more than they are separate; some practitioners like to express this added value by saying in these cases 1 + 1 equals more than two.
What are the benefits of a merger between Kraft and Cadbury?
Kraft Foods & Cadbury - The key benefits of this horizontal merger of food companies include the entering of new markets for Kraft, as well as Cadbury enjoying Kraft’s larger supply chain.
Why are horizontal mergers closely watched?
Horizontal mergers are closely watched by the Government in order to avoid oligopoly (where the market is highly concentrated and dominated by a few - not to be confused with a monopoly).
How does an acquirer increase customer demographic?
increase customer demographic via geography or new products/services - as previously mentioned, the acquirer can quickly expand its customer base and break into new markets via horizontal mergers
Why compare mergers to previous mergers?
compare the merger to previous mergers to gain insight and leverage stronger predictions
What is the strongest method of horizontal integration?
The strongest method for horizontal integration is through merging with local or regional players in the same industry.
What is horizontal merger?
Horizontal: The merging companies are operating in the same industry selling the same product. Such are intended to draw benefits of synergy and market consolidation. Usually, it results in larger market share, reduction in operating costs and economies of scale.
How does Merger work?
Typically, entities that decide to enter into a merger agreement are approximate of equal size in terms of the scale of operations. As such, it is sometimes known as “merger of equals”.
What is the purpose of a merger of equals?
Most of these are done to expand to new territories, gain more market share, cutback operating costs, expand top line or boots profitability. Post-merger, the shares of the new merged entity is issued to the existing shareholders of both the merging entities.
What is the difference between merger and acquisition?
Mergers and Acquisitions are somewhat different and some of the major differences are as follows: This is the process of combining two or more entities to form a new entity, while acquisition is the process in which the financially stronger entity takes over the shares of the financially weaker entity. This results in an amicable situation ...
What is the difference between a cash merger and a stock merger?
In a cash merger, the stocks of the target entity are purchased by the acquiring entity in cash, while in a stock merger, the stocks of the target entity are purchased in exchange for the stocks of the acquiring entity.
What is merger agreement?
The term “merger” refers to the agreement as per which two entities combine to form a new entity. In other words, it is the amalgamation of two separate entities into a single legal entity. In the corporate world, there are several types of mergers that are completed with the different types of intentions, such as to venture into new segments, ...
Why is merger important?
So, it can be seen that a merger is a very important business strategy as it is imperative to grow a business, not just organically but also inorganically, to sustain in the constantly evolving market.
Why do two companies merge?
Because the two companies may be operating in the same industry, they may not necessarily have the same consumer base. By merging the two companies into one, the new organization now has access to a larger base of customers.
What are the advantages of horizontal integration?
Here are a few other advantages of horizontal integration: 1 Reducing competition 2 Increasing other synergies such as marketing 3 Creating economies of scale and economies of scope 4 Reducing other production costs
Why is horizontal integration important?
When undergoing a horizontal integration, however, it is important to look out for the disadvantages, such as increased regulatory scrutiny, failure to combine synergies, and destroying value, which would make the entire process worthless and costly.
What are the benefits of merging two companies?
The most obvious benefit is an increased market share or market power. When the two companies merge, they also combine the product base, technology, and services that are available on the market. With more products under one name, the new company can increase its foothold among consumers.
Is horizontal integration good for two companies?
Undergoing horizontal integration can be very beneficial for two companies. Typically, this happens when two companies competing in the same industry at the same stage of production decide to unify. But before considering it, businesses should weigh the pros and cons of the strategy and how becoming one large organization would play out for their bottom line.
What is horizontal merger?
Horizontal merger: This involves the merging of two entities in the same industry. Horizontal mergers often involve competitors who want to capture a larger market share, enjoy merger synergies and achieve economies of scale.
How do mergers work?
Mergers and acquisitions involve lengthy and often secret negotiations between two companies. The larger of the two firms often take the first step, followed by deliberations between their boards. Here are steps involved in merging or acquiring companies:
How does valuation work?
Valuation is the determination of a company's current economic value by assessing every aspect of its business. Businesses perform valuations when they are merging or being acquired by another entity. Besides identifying the fair value of a company, firms also perform valuation to determine partner ownership and for tax purposes.
What are the different types of mergers?
Here are the common types of mergers: 1 Horizontal merger: This involves the merging of two entities in the same industry. Horizontal mergers often involve competitors who want to capture a larger market share, enjoy merger synergies and achieve economies of scale. 2 Vertical merger: This is a merger between two businesses that sell different products but share common supply chains. The aim of this transaction is to improve efficiency. 3 Conglomerate merger: The process where two companies that share no similarities become one to reduce risk, share assets and benefit from scale. In a pure conglomerate merger, the merging entities are unrelated and serve different markets. Mixed conglomerate mergers help companies access new markets or expand product lines. 4 Market extension merger: This is the merging of two companies in the same industry but different markets to gain a larger number of customers. The companies usually sell the same products or services, so the merger is aimed at gaining a larger client base. 5 Product extension merger: This merger involves two entities selling related products in the same industry. Both entities often share similar production processes, supply chains and distribution channels. The aim of the merger is to allow the two companies to group their products together to increase market access and profits.
What is the purpose of an acquirer in a merger?
If the target company is amenable to a merger or acquisition, the acquirer requests information about its health. This provides deep insights into the company's finances, product performance and other vital metrics that will help the larger company make informed decisions going forward.
What happens when two companies merge?
The stocks of the merging companies will cease to trade and be issued in the name of the new entity. Acquisitions involve one company buying the assets of another company. The assets of the target company become that of the buyer, but the acquired company does not change its name or structure. The stock of the acquired entity will become that of the buyer and cease to trade under its former name.
What is a conglomerate merger?
Conglomerate merger: The process where two companies that share no similarities become one to reduce risk, share assets and benefit from scale. In a pure conglomerate merger, the merging entities are unrelated and serve different markets. Mixed conglomerate mergers help companies access new markets or expand product lines.
Why is merger important?
With the evolving market, it is crucial for a business to keep innovating either by the organic or inorganic way.
What are the different types of mergers?
The different kinds of mergers include – conglomerate, horizontal, vertical, product extension and market extension.
What banks are merging in 2020?
Bank mergers are also quite common in the business world. For example, in 2020, Huntington Bancshares Incorporated and TCF Financial Corporation, a well-known US regional bank holding company, underwent an all-stock merger. Together they formed a new corporation that had a market worth of $22 billion.
How to find merger fillings of a company from SEC?
Shareholders can find merger fillings of the company from SEC’s database by looking for the proxy statement or information statement.
What is a conglomerate?
A conglomerate#N#Conglomerate A conglomerate is a company or corporation made up of different businesses that operate in various industries or sectors, often unrelated. It holds a stake in multiple smaller companies that choose to manage their business separately to avoid the risk of being in a single market, thus, taking advantage of diversification. read more#N#is a type of merger, in which companies are not engaged in related business. It will involve companies which are having no business in common. Usually, these are done, keeping in mind shareholding values.
Why is the cost of operation reduced?
Reduced Cost of Operations: Another advantage is that the size of a merged company gets bigger compared to individual companies. So, because of the economy of scale, the total cost of operation can be reduced.
How big was the Exxon Mobil agreement?
The size of the agreement was $73.7 billion. Exxon was the largest energy company, while Mobil was the second-largest oil company in the whole US at that time. With this, Exxon Mobil became the largest oil company and the third-largest company in the world.
What happens when companies merge?
Depending on which companies are merging and where they already have a footprint, the newly combined company might settle into an existing headquarters or find a new spot to start a life together.
What happens when a triangular merger is reversed?
In a reverse triangular merger, A merges a shell/subsidiary with B. B absorbs the subsidiary and liquidates it, then becomes the subsidiary of A. If a certain threshold of the target's stock is acquired with the voting stock of the buyer, this can count as a tax-free reorganization.
What is an all cash transaction?
In an all-cash deal, the transaction is, well, cash (or at least those vague finance-y definitions of "cash" that aren't literal briefcases of Benjamins). It happens when Company A, the buyer, acquires a majority of Company B's common shares outstanding with just cash.
What are some examples of mergers?
Some mergers are love triangles 1 Examples of reverse triangular mergers include Charles Schwab’s acquisition of TD Ameritrade and Dr Pepper and Keurig’s merger. 2 This process is distinct from a reverse merger, in which a public and a private company merge (often using a smaller, public shell company) and the latter goes public without the stress and price tag of an IPO. Dell used a reverse merger with VMware to return to the public markets in 2018.
How does an all stock acquisition work?
How an all-stock acquisition works: In an acquisition where Company A is acquiring Company B, A pays B's shareholders a certain number of shares set out in the merger agreement. If it's a 1:1 all-stock deal, a B shareholder with 1,000 shares gets 1,000 shares in A; if it's a 1:2 deal, they'd get 500. And so on.
Why do all stock mergers happen?
Why do an all-stock merger? The acquiring firm can hang onto its cash reserves for other uses or , if they don't have enough cash to make the deal in the first place, use stock instead of borrowing cash. It's also a good setup for shareholders in the merging companies who want ownership in the new company because they think it will continue to grow and give them a return on their investment.
What are some examples of reverse triangular mergers?
Examples of reverse triangular mergers include Charles Schwab’s acquisition of TD Ameritrade and Dr Pepper and Keurig’s merger.
Why do companies merge?
While reduced competition is a major benefit for companies, the company also needs to be careful during the process of a merger or acquisition to ensure it is compliant with the Federal Trade Commission's (FTC) regulations restricting monopolies.
What is horizontal integration?
Horizontal integration is the process in which one company merges, acquires or takes over another company within the same value chain.
What are the disadvantages of horizontal integration?
Regulatory scrutiny. One of the largest disadvantages of horizontal integration is the strict regulatory scrutiny of the FTC. The FTC closely monitors horizontal integrations to prevent companies from building monopolies through increased market share. A monopoly exists when one company dominates the market.
Why is horizontal integration important?
It is also important for individual consumers to understand horizontal integration because of the impact that a merger or acquisition of two companies can have on an industry and the overall market.
How does vertical integration differ from horizontal integration?
Vertical integration differs from horizontal integration in that it combines two companies, each with its own role in the production process.
What is the process of two companies of a similar size joining to create a new single joint entity?
Merger : A merger is the process of two independent companies of a similar size joining to create a new single joint entity. Acquisition: An acquisition is the process of one company purchasing another company. Takeover: A takeover is the process of one company acquiring another company that does not want to be purchased.
What is the purpose of combining two companies into one?
The combination of the two companies into one larger company allows the new resulting company to increase their product differentiation by combining the product and service offerings of each individual company.
Explanation
Why Do Companies Go For Horizontal Mergers?
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Horizontal Merger Example
- Example #1
Suppose ABC Ltd. sells steel products, and PQR Ltd. sells steel at the retail level to individuals. In this example, there can be a horizontal merger between these two companies to create synergy and increase the revenues and market shares of the group. ABC Ltd. PQR Ltd. ABC PQR Ltd (… - Example #2
Suppose ABC Ltd. is into the manufacturing of plastic bags, and PQR Ltd. is into the business of manufacturing plastic packets. Then, there can be a horizontal merger between these two companies that can gain synergy in the following way: – ABC Ltd. Profit & Loss Account PQR Lt…
What Are The Issues Faced in The Horizontal Merger?
- Cultural Integration Difficulties: Cultural issues are usually faced in all mergers but are especially evident in horizontal mergers. Since the two companies operate in a similar industry, they hav...
- Different Management Styles: Both companies’ management styles must be different. A merger may lead to clashes in both the management and an unsuccessful union.
- Cultural Integration Difficulties: Cultural issues are usually faced in all mergers but are especially evident in horizontal mergers. Since the two companies operate in a similar industry, they hav...
- Different Management Styles: Both companies’ management styles must be different. A merger may lead to clashes in both the management and an unsuccessful union.
- Might Create a Monopolistic Market: It may also create a monopoly if two of the biggest players operating in that industry merge. For example, if a company with a 35% market share merges with a com...
- Product Cannibalization: The merger of two companies operating in a similar industry also may lead to product cannibalization of either company. Let’s consider the earlier example of the m…
Recommended Articles
- This article is a guide to the Horizontal Merger definition. Here, we discuss why companies go for mergers, along with horizontal merger examples and explanations. You can find out more about these articles: – 1. Examples of Horizontal Integration 2. Merger Definition 3. Mergers vs. Acquisitions 4. Statutory Merger 5. Top 10 Best Mergers and Acquisitions (M&A) Books
What Is A Horizontal Merger?
How Horizontal Mergers Work
- A horizontal mergercan help a company gain competitive advantages. For example, if one company sells products similar to the other, the combined sales of a horizontal merger will give the new company a greater share of the market. If one company manufactures products complementary to the other, the newly merged company may offer a wider range of pr...
Horizontal Merger vs. Vertical Merger
- The main objective of a vertical merger is to improve a company’s efficiency or reducing 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 ca…
Special Considerations
- A horizontal merger of two companies already excelling in the industry may be a better investment than putting a lot of time and resources into developing the products or services separately. A horizontal merger can increase a company’s revenue by offering an additional range of products to existing customers. The business may be able to sell to different geographical territories if on…
How Horizontal Mergers Work
Horizontal vs. Vertical Mergers
- While a horizontal merger occurs when two companies in the same industry come together, a vertical mergeroccurs when companies that provide different supply chain functions/products/services combine. Oftentimes, the goals behind this type of vertical merger are to capture synergiesand improve productivity by creating a business with a more efficient suppl…
Advantages of Horizontal Mergers
- All of the advantages of horizontal mergers are essentially benefits of scale. They include, but are not limited to: 1. Bulk discounts from suppliers 2. Lower manufacturing costs per unit 3. Improved access to human capital 4. Improved access to financial capital (lower cost of capital, etc.) 5. Larger customer base
Disadvantages of Horizontal Mergers
- Antitrust Issues:Nothing attracts the attention of the Antitrust bodies quite like a horizontal merger; in fact, when looking for cases where the US antitrust agencies have become involved in M&A,...
- Putting all your eggs in one basket: The merger of Alliance Boots and Walgreens in 2014 to create the largest pharmacy chain in the world seemed like a good deal, but it was a one wa…
- Antitrust Issues:Nothing attracts the attention of the Antitrust bodies quite like a horizontal merger; in fact, when looking for cases where the US antitrust agencies have become involved in M&A,...
- Putting all your eggs in one basket: The merger of Alliance Boots and Walgreens in 2014 to create the largest pharmacy chain in the world seemed like a good deal, but it was a one way bet on tradit...
- Scale becomes unwieldy: Scale has downsides to go with the upsides - extra layers of middle management, loss of control across the organization, and a general lack of agility are all common growing...
- Overpaying:Horizontal mergers are often associated with overpaying; the threat - real or ima…
Horizontal Merger Guidelines
- Horizontal mergers are closely watched by the Government in order to avoid oligopoly (where the market is highly concentrated and dominated by a few - not to be confused with a monopoly). More specifically, the Department of Justice and the Federal Trade Commission have established guidelines related to horizontal mergers. In their words, they “seek to identify and challenge com…
Horizontal Merger Process
- While every deal is different, the following provides an overview of the horizontal merger process. Additional plays and steps might be implemented based on your specific goals and deal characteristics. 1. Identify and articulate the overarching strategy and goal behind engaging in M&A, specifically a horizontal merger 2. Identify potential targets and cultivate relationships with …
When to Horizontally Merge
- The strongest method for horizontal integration is through merging with local or regional players in the same industry. Horizontal mergers don’t just happen at the top end of the market: The best way for many smaller players in any industry to scale up is through horizontal mergers with companies that you’re competing with on a regular basis. Most business owners will know a han…
Table of Contents
Key Takeaways
How Does It Work?
Types of Merger
Examples
Difference Between Merger and Acquisition
Post Merger Integration
Advantages and Disadvantages
Conclusion
FAQs
- 1. What is a merger? What are its types?
Answer: A merger is establishing a new entity by combining two independent businesses. In other words, it combines two distinct legal entities into one. The five types are conglomerate, horizontal, vertical, product extension, and market extension. - 2. What does a reverse merger mean?
Answer: A reverse merger is when a private corporation buys a publicly listed corporation. It is also called a reverse takeover (RTO) or reverse IPO. It simplifies the process of a private company going public.