A market extension merger is a type of merger in which two or more companies in the same industry sector combine in order to expand their market reach.
Typically, market extension mergers involve two companies which operate in different geographic regions.
Example: A company has a strong presence in German-speaking Switzerland while another company in the same sector has a strong presence in French-speaking Switzerland. A market extension merger between the two companies would result in one company or group with a strong countrywide presence.
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