The difference between a Merger and a Takeover is that a Merger is a mutual decision between to companies who decide to merger together and become one. This decision is made so that both companies are equal. A Merger is usually made in the hopes to gain more of a a viewing audience to gain more power.
A takeover however is when a larger company will buyout a smaller company. This takeover shows that the combination are "unequals". The smaller company will sometimes show resistance to the larger company. However sometimes their can be friendly takeovers for example when the Walt Disney corporation bought Pixar Animation studios in 2006. This was friendly because the shareholders approved in the decision.
A good example of a Company merger was when the US company Viacom merged with yet another big television company called CBS. This was known to be on of the worlds biggest media merger. This company was then on to be described as a "Media Empire". The company would be called Viacom. The company was then valued in at $80 billion. Viacom then came to be one of the big six companies in Media. It is one of the biggest rivals against the company "Walt Disney". From both sides the merger was described as an equal acquisition.
In the media there is a lot of competition on who is the most richest and most powerful Just recently there has been talks of Virgin Media being taken over by a US cable company called Liberty Global. Virgin Media as we know in the UK is a huge company and is very know over here and hugely popular the audience. In the UK it is known as one of the leading suppliers of broadband and has over 5 million customers. Liberty Global is a one of the largest broadband provider outside of the united states. It was formed in 2005 when the companies 'Liberty Media' and 'UGC (United Global Com)' merged together. Its now a company who internationally telecommunications and is a television company. As of September 30 2012 its become popular with its cable services passing 33.7 million homes. Its been announced in February 2, 2012 that it will buy Virgin Media for $23.3 billion dollars. Both shareholders and regulatory have approved and it is very likely that the deal will come through.
Vertical Intergation
Vertical interagation is a process of when a product is controlled by a single company to increase the companys power in the marketplace. In similar words its that a product is made with the help of many different company's however when its sold only a well known brand is used to advertise and sell that product. Its when two companies who are in the same industry but in different stages in production come together. A good example of this is with the well know film company Warner Bros.
When a film is made it will be filmed in a studio and then shown in a Cinema. However Warner Bros Entertainment will call itself a fully integrated broad based entertainment company. This is because Warner Bros owns film studios, the means to distribute the film to the public as well as some Cinemas the films will be shown in. As well as this Warner Bros is also part of a bigger company known as 'Time Warner'.
Horizontal Integration
Horizontal integration is when a company comes up with a strategy to increase their market share by taking over a similar company. The merge/takeover can be done in the same country however you usually find its done outside of the country to increase your reach. Horizontal Integration is much simpler that Vertical integration Where as Vertical integration is a merger of companies in the same industry but in different stages of production where as Horizontal integration is a merger of companies based in same field. For example it would the merger of two music production companies or two film production companies.
A good example of Horizontal integration in the Media industry is when 'Google' took over 'You Tube'. 'Google' bought 'YouTube' for 41.65 billion (£882 million). 'You Tube' was first launched in February 2005 and since has grown to be the most popular website on the internet. Over 100 million videos get viewed every single day and every month 72 million individual visitors each month. The two companies have been described as "natural partners" and are hoping that 'You Tube' joining forces with 'Google' that it can benefit from 'Google's' unbelievable global reach and their technology leadership to deliver a more comprehensive entertainment experience for the users.
Since the Merger when opening the Google homepage along the heading there is now a button to connect you to 'You Tube' automatically.
