... agreement of the management of both companies, usually through an exchange of shares of the merging firms with shares of the new legal entity".1 A merger can be confused with a takeover which is in fact the act of gaining control of a company by buying its shares and occurs "when the management of Firm A makes a direct offer to the shareholders of Firm B and acquires a controlling interest". 2 These terms in practice are interchangeable. However, there are different types of merger activity; firstly, Horizontal Integration, which is firms at the same stage in a production process merge together and are involved in similar products. It was most popular form of merger in the 1960's especially in the car industry e.g. British Leyland and again in the 1990's accounting for 80% of merger activity3. Vertical Integration occurs when firms merge at different stages of production but are ...

See this essay or coursework document in full right now