What element is necessary for a merger to be horizontal?

For a merger to be classified as horizontal, it is essential that the merging companies operate within the same industry and produce the same product or service. This means that they compete directly with each other in the same market. By merging, these companies may aim to increase market share, reduce competition, and achieve economies of scale.

Option referring to having the same product in different regions illustrates this concept well because it maintains the same competitive dynamics that exist in their original markets. When companies that produce identical products come together, they consolidate their market presence, which is a hallmark of horizontal mergers.

This type of merger contrasts with others, such as vertical integrations (which involve companies at different stages of production) or mergers between firms producing different products. These do not fulfill the criteria for horizontal mergers because they do not reinforce or expand competitive positioning within the same product category in the same market.