What are Advantages and disadvantages of horizontal merger?

Answer:
Definition:
A horizontal intergration occours when a firm takes over or merges with another firm in the same stage of production, Producing similar or same products .

+Advantages
+Achieave Greater Economies of Scale
+Increase its market share
+Reduction in average cost as a result of rationalization

-Disadvantages
-Increase in average cost -if the company is too large and experiencing dis economies of scale

-The two companies maybe located some distance apart,although advances in ICT are reducing this problem.

-There is initially likely to be some extra cost involved in seeking to harmonize,for instance,wage rates and accounting systems in the two companies

I hope this will help you :D
First answer by ID0460499931. Last edit by ID0460499931. Question popularity: 2 [recommend question].