Presentation for viva
KALPESH PARMAR
HPGD/JL18/1710
STATEGIC FIT IN MERGERS AND ACQUISITIONS – AN
IMPERATIVE
INTODUCTIONS TO MERGER AND
ACQUISITION
Consolidation of companies.
Differentiating the two
terms, Mergers is the combination of
two companies to form one,
while M&A is one of the major aspects
of corporate finance world. The
reasoning behind M&A generally given
is that two separate companies
together create more value compared
to being on an individual stand. With
the objective of wealth maximization,
companies keep evaluating different
opportunities through the route of
merger or acquisition.
Mergers is the combination of two companies to form
one.
Acquisitions is one company taken over by the other.
TYPES OF MERGER AND ACQUISITION
The 3 types of mergers are Types of Acquisitions are
Horizontal mergers whi
ch increase market share Friendly
Hostile
Vertical mergers which Depending upon
exploit existing synergies. Acquire or merging is or
isn’t listed in public
concentric mergers whic
markets.
How the communication is
h expand the product
done and received by the
offering.
target
History of
Merger and Acquisition
Mergers and acquisitions (M&A) are transactions in which the
ownership of companies, other business organizations, or their operating
units are transferred or consolidated with other entities. As an aspect
of strategic management, M&A can allow enterprises to grow or downsize,
and change the nature of their business or competitive position.
Most histories of M&A begin in the late 19th century United States.
However, mergers coincide historically with the existence of companies. In
1708, for example, the East India Company merged with an erstwhile
competitor to restore its monopoly over the Indian trade. In 1784, the
Italian Monte dei Paschi and Monte Pio banks were united as the Monti
Reuniti.[35] In 1821, the Hudson's Bay Company merged with the rival North
West Company.
Ten biggest Mergers and Acquisitions deals in India
1 The Reliance – BP deal
2 Idea exits Vodafone
3 The Fortis Healthcare merger
4 iGate acquires majority stake in Patni Computers
5 GVK Power acquires Hancock Coal
6 Essar Energy’s Stanlow Refinery Deal with Royal Dutch Shell
7 Aditya Birla Group to acquire Columbian Chemicals
8 Mahindra & Mahindra acquires Ssangyong
9 The Vedanta – Cairn acquisition
10 Adani Enterprises takes over Abbot Point Coal
DIFFERENCE BETWEEN MERGER
ANDACQUISITION
Mergers Acquisition
i. Merging of two organization in i. Buying one organization by to
ii. It is the mutual decision one. another.
iii. Merger is expensive than hostile ii. It can be friendly takeover or
takeover. acquisition(higher legal iii. Acquisition is less expensive
cost).
iv. Through merger shareholders
iv. Buyers cannot raise their
v. It is time consuming and the
than merger. can increase their net
enough capital. company has to worth.
maintain so much legal issues. v. It is faster and easier transaction
vi. The acquirer does not
vi. Dilution of ownership occurs in experience the dilution of
merger. vi. The acquirer does not ownership.
experience the dilution of ownership.
Amalgamation
Amalgamation is defined as the combination of one or more companies into a
new entity. It includes:
Two or more companies join to form a new company
Absorption or blending of one by the other
Thereby, amalgamation includes absorption.
However, one should remember that Amalgamation as its name suggests, is
nothing but two companies becoming one. On the other hand, Absorption is the
process in which the one powerful company takes control over the weaker
company.
Generally, Amalgamation is done between two or more companies engaged in the
same line of activity or has some synergy in their operations. Again the companies
may also combine for diversification of activities or for expansion of services
Transfer or Company means the company which is amalgamated into another
company; while Transfer Company means the company into which the transfer or
company is amalgamated.
Steps of Mergers and Acquisition Process
Reverse merger
A reverse merger is
a merger in which a private
company becomes a public
company by acquiring it. It
saves a private company
from the complicated
process and expensive
compliance of becoming a
public company. Instead, it
acquires a public company as
an investment and converts
itself into a public company.
BIOBLOGRAGHY
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