Companies pursue vertical mergers for several strategic reasons:
1. Cost Reduction: By merging with a supplier or distributor, companies can lower their production and distribution costs. 2. Improved Supply Chain Control: Vertical integration allows companies to have better control over their supply chain, improving reliability and reducing risks. 3. Increased Market Power: Companies can gain more power over the market by controlling multiple stages of the production and distribution process. 4. Enhanced Efficiency: Vertical mergers can streamline operations and improve efficiency, leading to better product quality and faster time-to-market.