Final answer:
A vertical merger combines companies at different stages of the production or supply chain, aiming for efficiency and supply chain security. It differs from horizontal and conglomerate mergers, which involve competitors or unrelated business sectors, respectively.
Step-by-step explanation:
A vertical merger combines firms operating at different levels in the production and marketing process. Unlike a horizontal merger, where firms producing the same kind of product join together, a vertical merger involves companies at different stages of production or supply chain. This type of merger can help companies secure their supply chains and potentially streamline production and distribution processes, leading to increased efficiency. In contrast, a conglomerate merger involves a combination of firms that operate in unrelated businesses, which allows for diversification of business interests and reduction of overall business risk.