The benefits of vertical acquisitions are numerous:
1. Economies of Scale: By combining operations, companies can achieve economies of scale, reducing per-unit costs. 2. Improved Coordination: Better coordination between different stages of production can lead to more efficient processes and higher-quality products. 3. Lower Transaction Costs: Eliminating the need for negotiating and enforcing contracts with external suppliers can lower transaction costs. 4. Increased Market Share: By controlling more of the supply chain, companies can increase their market share. 5. Barrier to Entry: Vertical acquisitions can create barriers to entry for new competitors, making it harder for them to compete.