A vertical merger takes place when

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A vertical merger takes place when a firm either integrates its production backward toward its source of supply (backward integration) or forward in its marketing chain (forward integration). This can help the firm gain more control over the supply chain, reduce costs, and improve efficiency. Acquiring a conglomerate (A) or a competitor (B) would be a horizontal merger, and diversification (D) typically refers to a conglomerate merger.

A Vertical Merger Takes Place When