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A vertical merger represents a merger of the firms engaged at different stages of production or distriution of the same product but at or same service. In this case two or more companies dealing in the same product but at different stages may may join to carry out the whole process itself. A petroleum producing company may set up its own petrol pupmps for its selling. A railway company may joining with the coal mining for carrying coal to different industrial centres. Similarly a textial unit may may merge with a transport company for carrying its products to the different places. All these are the examples of verticle merger. The idea behind this type of merger is to take up two different stages of work to ensure the speedy production or qucik service.
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