What is generally associated with horizontal mergers?

Horizontal mergers typically involve companies that operate at the same level in the same industry, often selling similar products or services. This type of merger is generally associated with less competition in the market because it consolidates two or more entities that are direct competitors. As a result, the merged company gains a larger market share, which can lead to increased pricing power and reduced competitive pressures.

In this context, the reduction in competition often raises concerns from regulatory bodies, as such mergers can lead to monopolistic practices or oligopolies, where only a few companies dominate the market. These mergers are strategically aimed at enhancing efficiency, achieving economies of scale, and strengthening market position rather than diversifying products or creating new supply chains.