Horizontal Integration - Vodafone and Three in Merger Talks

It seems as though there might be big merger activity afoot, with Vodafone and Three looking like merging - and in doing so, going from the 3rd and 4th largest UK mobile networks to the largest.

The companies are claiming that it will speed up the rollout of the 5G network and improve broadband connectivity.

But the merger is inevitably going to be subject to tough scrutiny from the the Competition and Markets Authority (CMA), not least with concerns about the impact of less choice on the price of mobile deals during a cost of living crisis.

A joint venture might be the result of their discussions rather than a fully-fledged merger and integration of the two businesses

Vodafone and CK Hutchison, the owner of Three UK stand to create a mobile operator powerhouse with 27m customers by the end of the year.

This is a good chance to think about some of the advantages and drawbacks from horizontal integration between businesses.

This video looks at recent example of horizontal mergers and takeovers and revises some of the key potential benefits and drawbacks from this form of external growth.