Horizontal acquisitions, also known as horizontal mergers, are the acquisition of a competing business that produces similar goods and services. This type of acquisition seeks to combine the assets and resources of two different entities in the same industry in order to create economies of scale and new opportunities for growth. By combining the assets and resources of both companies, the acquirer is able to increase their market share and acquire a larger and more diverse customer base. Horizontal acquisitions usually involve the purchase of the target company's assets, stock and/or other ownership interests.

Horizontal acquisition strategies are designed to reduce costs and improve efficiency. The acquirer can benefit from a larger production base and a more diverse portfolio. There are several advantages to a horizontal acquisition. By purchasing another company’s resources, the acquirer may increase their market power and leverage the target’s resources and skills. Additionally, the acquirer may gain access to the target company’s customer base, giving them a larger reach and the ability to penetrate new markets. By capitalizing on the target’s reputation and customer base, the acquiring company can increase their sales, profits and market share.

At the same time, there are some drawbacks to a horizontal acquisition. It can be challenging to effectively integrate the two businesses and most acquisitions involve considerable costs. Additionally, the target entity is likely to have their own goals and objectives, which may conflict with those of the acquiring company. To be successful, the acquiring company must take appropriate steps to effectively coordinate the two businesses. Furthermore, horizontal acquisitions involve antitrust scrutiny and can be difficult to execute due to anti-trust regulations.

Overall, horizontal acquisition is a viable strategy for companies looking to reduce costs and expand their markets and customer base. While there are drawbacks to such acquisitions, with careful planning and management, the potential rewards can be great.