Question

Would a merger between Microsoft and Intel be a horizontal or vertical merger? Please explain.

Answer 1

Answer - The merger of Intel and Microsoft will be vertical merger and not horizontal. Horizontal mergers occurs between companies selling the same product and they come together in order to reduce the competition. Vertical integration takes place between companies coming together to integrate the different processes or commodities.

Microsoft produces softwares , and intel produces hardware i.e memory chips , processors , graphic cards etc. Hence the coming together of these will mean integration of two different companies making different product which can complement each other. Hence this would be vertical integration and not horizontal.