Horizontal diversification

Horizontal diversification. New and unrelated products are added for current customers. 

The evidence provided in Table 9 does not support this hypothesis for Horizontal diversification strategies. Minority is constantly lower for Broad than Strict Horizontal, whatever the market entered. The results for Vertical integration are mixed. Minority plays a major role both in absolute and relative terms in Vertical-Diversification and Vertical-to-Core for investments originating in North America (first two columns). However, this is not the case for M As undertaken by European acquirers. 

As far as vertical integration is concerned, the relative importance of this diversification strategy is higher for international M As compared to domestic ones. The number of Vertical-Diversification transactions is consistently higher than Vertical-Horizontal M As. Moreover, Table 8 shows that the number of Vertical-to-Core transactions is pretty much the same as those labelled Vertical Diversification. This means that vertical integration is the result of two-way flows chemical firms expanding their activity up-stream and down-stream, but also non-chemical firms expanding in CCs. 

Recall that transactions in CCs that do not share any product line are represented in Broad Horizontal. The same idea applies to Vertical-Diversification and Vertical-to-Core. We would expect Minority acquisitions to be more common for Broad Horizontal, Vertical-Diversification and Vertical-to-Core because of the acquirer s supposed lack of experience in these markets. 

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