One of the clearest examples of horizontal integration is Facebook’s acquisition of Instagram in 2012 for a reported $1 billion. Both Facebook and Instagram operated in the same industry and were in similar production stages in regard to their photo-sharing services. Facebook, looking to strengthen its position in the social media and social sharing space, saw the acquisition of Instagram as an opportunity to grow its market share, increase its product line, reduce competition and access potential new markets. All of these things came to pass, resulting in a high level of synergy.
Another great example of a horizontal integration is Disney’s acquisition of Pixar Studios. Disney, facing market saturation with its current operations, was looking for ways to expand and increase profits. Disney had started out as an animation studio that targeted families and children. Pixar Studios also operated in the same space as Disney, but it had more cutting-edge technology when it came to digitally animated movies. To grow its market share, strengthen its product line, reduce its competition and access new markets, Disney acquired Pixar Studios.
Exxon’s acquisition of Mobil is a good example of a horizontal integration. Both operated in the same industry and were in similar production stages, and Exxon was able to gain access to Mobile’s gas stations as well as its product reserves.
These are all textbook examples of horizontal integration. All acquisitions were made by companies looking to strengthen their positions in the current market and enhance their current production stage.