M&As can be categorized as horizontal,
vertical, or conglomerate. In horizontal
M&As, the companies are essentially
competitors operating in the same industry
and on the same industry level. Vertical
M&As involve firms that operate in different
stages of the same industry. Firms in
conglomerate M&As, by contrast, do not
operate in the same business sector at all.
The likelihood is high that the degree of
both internal and external relatedness in
horizontal M&As will be greater than that
of vertical or conglomerate M&As
(Chatterjee et al. 1992). This implies that
of the three types, horizontal mergers will
have the greatest likelihood of success.