Horizontal integration is a business strategy in which a company increases its production of goods or services at the same level of the value chain, in the same industry, by acquiring or merging with another company that offers similar products or services. This strategy can create economies of scale, increase market power over distributors and suppliers, improve product differentiation, and help businesses expand their market or enter new markets. Horizontal integration can take various forms, including expanding through new product development, expanding geographically, or acquiring competitors or suppliers.

Horizontal integration is different from vertical integration, which involves the acquisition of business operations within the same production vertical. In horizontal integration, the company aims to remain within its current part of the supply chain, while in vertical integration, the company takes control over one or more stages in the production or distribution of its products.

Some examples of horizontal integration include the merger between Exxon and Mobil, and the acquisition of Instagram by Facebook. While horizontal integration comes with its share of challenges, the strategy can offer a number of benefits for businesses when the integration is carried out successfully.