Horizontal Combination

Horizontal Combination

The horizontal combination is the association or merger of business organizations doing exactly the same type of business or trade. To achieve some general objectives of this combination will be made some industries or organization. For example, the cement industries example can be drawn in front. If some cement industries combine themselves for achieving some economic end, this will come under the preview of the horizontal combination.

Sarker said about this combination, “The horizontal combination takes place when the units caring on identical business join hands to achieve some common objectives.”

The horizontal business combination takes place when the unit carrying on identical business activities combines firms or units at the same stage of production or at the same level of activity in trade or commerce. The rationale behind such combinations is the need to do away with fierce competition.

The main objectives of forming such a combination are to eliminate competition and in some cases, to achieve economies of large-scale production and distribution this combination is conducted individually or collectively. The mainly horizontal combination is made to eliminate competition, large producing, collectively distribution.