Horizontal, Vertical, and Conglomerate Mergers

Victor J. Tremblay and Carol Horton Tremblay
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Victor J. Tremblay: Oregon State University
Carol Horton Tremblay: Oregon State University

Chapter Chapter 18 in New Perspectives on Industrial Organization, 2012, pp 521-566 from Springer

Abstract: Abstract The immediate and most dramatic way for a company to expand its size and influence market structure is to purchase another company. Historical examples abound. In the late 1800s, Standard Oil Company gained a 90% share of the petroleum market by purchasing more than 120 competitors. In the 1960s, ITT (International Telephone and Telegraph) became a diversified corporation by acquiring 52 domestic and 55 foreign companies, including such well-known businesses as Avis Rent-a-Car, Continental Baking (Wonder Bread), Hartford Insurance, and Sheraton Hotels. By 1968, ITT had become the 11th largest corporation in the USA. The recent financial crisis has forced a number of very large acquisitions. The largest of these occurred in 2008, with Bank of America purchasing Merrill Lynch, a provider of insurance and financial services, for $50 billion and Wells Fargo Bank purchasing Wachovia Bank for $15.1 billion.

Keywords: Market Power; Chief Executive Officer; Consumer Surplus; Vertical Integration; Total Surplus (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/978-1-4614-3241-8_18

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