1. Mergers
By Emily Watson

2. Definition
A deal to unite two existing companies into one new company; when two companies consolidate by mutual agreement
There is shared ownership, control, and profit

3. Pros
Increase operational efficiency (reduced costs) by uniting resources
Diversification by sharing skills and knowledge
Access to new markets (international, etc.)
More profit enables more research & development
Decrease competition
Protect an industry from closing

4. Cons Monopoly  higher prices for consumers Less choice for consumers
Potential job losses
Less control in decision making  disagreements between two parties

5. Types Horizontal – same industry
Vertical – producing different goods/services for one finished product
Market Extension – sell same products but compete in different markets
Product Extension – add together products that go well together
Conglomerate – firms involved in unrelated business activities

6. Examples
JP Morgan & Co. and Chase Manhattan Bank = JP Morgan Chase & Co. (2000)
AMR Corporation and US Airways Group = American Airlines Group, Inc. (2013)