Final answer:
A vertical merger is the combination of firms at different stages of the production process for a given product or service, establishing a buyer-seller relationship.
Step-by-step explanation:
The type of merger described in the question, where two or more firms at different stages of production of a given product or service combine, and have a buyer-seller relationship, is known as a vertical merger.
In a vertical merger, the companies join together to improve efficiency, secure supply chains, and potentially gain a competitive advantage by controlling more stages of the production and distribution process.
In contrast, a horizontal merger involves companies that produce the same product or service merging to create a larger firm, potentially increasing market share and reducing competition.
A conglomerate merger involves firms that operate in unrelated business areas combining. Lastly, a hostile merger (or acquisition) occurs when one company acquires another without the target company's consent.