Abstract: Based on the supply chain model in horizontal M&A of differentiated products, not only the horizontal M&A integration modes under different decision-making mechanisms are analyzed, but also every entity′s changes and the influence of the degree of product differentiation on them are discussed. The results show that:the original two retailers retained during supply chain integration is beneficial to the M&A party when the two supply chains involved in M&A make decentralized decision-making, and the M&A effect will become stronger with the difference in degree of reduction. No matter whether the external retailers retain, supply chain integration is beneficial to the M&A party when the one supply chain involved in M&A makes decentralized decision-making but another one makes centralized decision-making; however, the M&A effect will become stronger with the difference in degree of reduction when external retailers retain and the M&A effect will become weaker with the difference in degree of reduction when internal retailers sell both of the two products. The M&A party is able to obtain profit when the two supply chains involved in M&A make centralized decision-making, and the M&A effect will become stronger with the difference in degree of reduction. Moreover, the M&A party will obtain more profit when vertical integration completed before horizontal M&A.

Key words: differentiated products, supply chain, horizontal M&A, decision-making mechanism, M&A effect