Vertical Mergers

A second irony is that the second merger wave followed passage of the Clayton Act, ending only after the Great Depression wilted corporate profits. Acquisitions during this period were primarily vertical, which entails gaining control over various stages of production from raw materials to finished manufacturing. Firms desiring to grow via merger were channeled toward vertical mergers, because horizontal mergers were squelched by bans on "monopolization or attempts to monopolize." Horizontal mergers were relatively trivial compared to the boom of monopolization that occurred during the first great merger wave.