What is a Conglomerate Merger?
Conglomerate mergers generally involve the union of two companies that have no type of common interest, are not in competition with any of the same competitors, and do not make use of the same suppliers or vendors. Essentially, the conglomerate merger usually brings together two companies with no connections whatsoever under one corporate umbrella. This type of arrangement can be very desirable when the investors for the newly created conglomerate wish to create a strong presence in two different markets. When the two companies involved have no direct or indirect connection or interest, this is referred to as a pure conglomerate merger. However, there is a second and less common type of conglomerate merger that is referred to as mixed. The mixed conglomerate merger will still involve companies that are more or less not related in terms of competition, but may have some connection as far as vendors or possibly two aspects of a common industry. For example, if a company chose to merge wi
What is a conglomerate? A conglomerate, sometimes called a multi-industry company, is company that consists of relatively unrelated divisions. A conglomerate merger is a merger, or joining of two companies, that creates a conglomerate; thus, the companies involved in a conglomerate merger must have fairly unrelated businesses. Pure conglomerate mergers involve firms with no overlap, while mixed conglomerate mergers involve companies that seem unrelated but for the purposes of market extension or product extension. In the United States, the 1960s is considered the era of conglomerate mergers.
