What is Merger:
As per my knowledge merger is the practice of combining two or more business with one another is however often complex and may subject to strict accounting principles to be followed. This method of purchase and acquisition need to provide an accurate record of books of account.
Types of merger:
As we all know, various types of mergers are there, basing on the production the business carrying on. I believe a horizontal merger is a merger that occurs between companies dealing with identical product in the same industry. Whereas a vertical merger is a merger of two companies producing dissimilar goods or services for one specific finished product. While on the other hand a conglomerate merger is a result of companies that are engaged in unrelated business production activities. Lastly a mixed conglomerate merger is merger where the companies associated with it intend a greater product or market extensions.
Vertical, Horizontal and Conglomerate Mergers:
The accounting for credit union mergers, just prior to the year of 2009 was very easy and not complied with so much accounting principles and standards. They used to do it by simply adding the two balance sheets of both credit unions together, which result a new entity. The method thus followed for this was known as Pooling of Interest method. However, the so called Pooling method was simple enough and didn’t require any fair value adjustments and for this reason it didn’t need the retention of fair value consultants.
In my opinion, three types of mergers have been seen in the industrial market and those are vertical, horizontal and conglomerate mergers. When a company joins with their supplier company in order to lessen the competition in the market to become one company is known a vertical merger. A horizontal merger is one where two competitive different companies in the same market merge and become one. Whereas, in case of conglomerate merger both the business houses deals in different product relating to different business market.