Vertical and Horizontal Mergers in Apparel Industry Essay

Vertical and Horizontal Mergers in Apparel Industry - Essay Example The essay "Vertical and Horizontal Mergers in Apparel Industry" talks about the vertical and horizontal mergers in the apparel industry. A merger is a company that is formed when two or more companies come together to form a single company. These companies may be dealing with the same or different lines of products but with a common finished product.If they deal in a similar line of product, a horizontal merger is formed. If they deal in a different line of products but with a common finished product, a vertical merger is formed. In the illustrations below, the paper shall focus on vertical merger and a horizontal merger in the apparel industry. To begin with a vertical merger, an analysis of study two clothing industries shall be done. That is the VF Corporation and the Timberland Company. The VF Corporation is an American clothing industry that deals in work wear, jeanswear, underwear, and daypacks. On the other hand, the Timberland Company is equally an American retailer and whole saler of outdoors wear, but with a focus on footwear. As it can be noticed, the two companies deal with different lines of product, but with a common finished product of outdoors wear. In June 2011, the VF Corporation acquired the Timberland Company thus forming a vertical merger. The primary objective of this merger was to make the production process and the distribution process more efficient and cost effective. In the agreement, VF was confident of keeping Timberland going by adding Timberland’s strong brands to its brands.