Which type of acquisition occurs between firms in the same industry?

The correct classification for an acquisition that occurs between firms in the same industry is a horizontal acquisition. This type of acquisition involves companies that compete in the same market or operate at the same level of the supply chain. By merging or acquiring competitors, firms can create economies of scale, reduce competition, expand market share, and enhance their product offerings.

Horizontal acquisitions are common in industries where firms seek to consolidate and gain a stronger foothold. For example, if two automotive manufacturers merge, they are pooling their resources, product lines, and customer bases to better compete in the automotive sector.

Other types of acquisitions differ in their focus and structure. Conglomerate acquisitions involve firms that operate in entirely different industries, aiming to diversify their operations or enter new markets. Vertical acquisitions occur when a company acquires another firm that is at a different stage of the supply chain, such as a manufacturer acquiring a supplier to control costs and improve production efficiency. Equity acquisitions generally refer to the purchase of a company's shares to gain ownership, which can occur in any of the aforementioned types but does not specifically denote the relationship between the industries of the firms involved.