In deciding the best type of a merger financial analysts must look at the main goals that they seek to realize. Depending on the requirements analysts, investment bankers and the managers of the respective companies can either choose from the following options. Firstly they can opt for a horizontal merger.
This is the kind experienced with the acquisition of Cadbury. Here the firms are in direct competition within the industry. The other option is for them to choose a vertical merger. This involves a company merging with another company in a related field or industry but at different levels of operations. An example of this would be the case of a tomato sauce maker merging with the supplier of the tomatoes. The other form is what we call a conglomeration. This involves the merging of companies in different industries.