What Does Conglomerate Merger Mean?
A conglomerate merger is a situation in which two or more firms from strategically unique areas of business unite. Conglomerate mergers exist in two types: pure and mixed. With a pure conglomerate merger, the merging firms have absolutely nothing in common and are simply trying to expand into new business areas. With a mixed conglomerate merger, the participating firms are trying to expand their product lines or target markets.
Divestopedia Explains Conglomerate Merger
A conglomerate merger shares the same goals as most other mergers; involved firms want to decrease their market risk exposure while hopefully capitalizing on successful synergies, increasing market share and cross-selling. However, especially with pure conglomerate mergers, participating firms must be careful that the merger actually makes sense and that there are growth opportunities. Additionally, firms must ensure that the conglomerate does not become too big to the point that the organization's focus and mission are lost.