MERGER & ACQUISITIONS

GROUP MEMBERS
Manashree Sawant
Abhishek Gawande
Rohan Chaulkar
Amod Bandekar
Shardul Thakker
Rahul Tayade
Akash Kharat
Snehal Khillare

MERGER

Combination of two or more companies into a single
company where one survives and other lose their
competent existence.

The survivor acquires the asset as well as the liabilities of
the merged company or companies.
TYPES OF MERGERS

Horizontal mergers

Vertical mergers

Conglomerate mergers

Reverse mergers
DE-MERGER

A single business is broken into components, either to
operate on their own, to be sold or to be dissolved.

Example :
British Telecom conducted a de-merger of its mobile
phone operations, BT Wireless, in an attempt to boost the
performance of its stock. British Telecom took this action
because it was struggling under high debt levels from the
wireless venture.

MERGER : Why & Why Not
WHY MERGERS FAIL?
Mergers fail in providing economies of scale

Un-utilization or minimum utilization of staff and
working hours

Inability to appeal countrywide and regionally to
refunders

Personal desires
ACQUISITION

One company buying out another to combine the bought
entity within itself.

Generally, the firm which takes over is the bigger and
stronger one. The relatively less powerful, smaller firm
loses its existence, and the firm taking over, runs the whole
business with its own identity.
Example: Microsoft acquired Skype, Mahindra acquired
Satyam.

TYPES OF ACQUISITION
Acquisitions can be either:

Hostile - The company, which is to be bought has no information
about the acquisition. The company, which would be sold is taken
by surprise. Example: Oracle acquired PeopleSoft.

Friendly - The two companies cooperate with each other and
settle matters related to acquisitions. Example: J&J acquired
Crucell.

ACQUISITION : Why & Why Not
DIFFERENCE BETWEEN MERGER &
ACQUISITION

MERGER & ACQUISITION PROCESS

Preliminary asset or Business valuation

Phase of proposal

Exit plan

Structured marketing

Origination of purchase agreement or merger agreement

Stage of integration
MOTIVES BEHIND MERGER &
ACQUISITION
Economies of scale

Operating economies

Synergy

Cross selling

Taxes savings

Greater value generation

Gain in market share

Resources transfer

IMPACT OF MERGERS & ACQUISITIONS
On shareholders

On Employees

On customers

On the new organization

On top level management

VALUATION RELATED TO
MERGERS & ACQUISITIONS

Market based method

Asset based method

Income based method
MERGER & ACQUISITION STRATEGIES
Examine target companys market performance and
market position.

Identification of future market opportunities.

Ensure that no potential problem crops up after
closing the deal.

Consider working environment and culture of work
force of the target company.
REGULATION OF MERGERS &
ACQUISITIONS IN INDIA
The Companies Act, 1956

The Competition Act, 2002

The Income Tax Act, 1961

SEBI Regulations Act, 1997

Foreign Exchange Regulation Act, 1973
Famous Mergers
Glaxo & SmithKline
NTT Docomo & Tata Teleservices
Bharti & Walmart
Lipton India & Brooke Bond




Famous Acquisitions
Tata Steel & Corus
Hindalco & Novellis
ONGC & Imperial Energy
Tata Motors & Jaguar Land Rover
Reliance Industries & Reliance Petroleum Limited
Google & Motorola
Lenovo & Motorola
THANK YOU