Corporate governance in mergers & takeovers

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its abt the role of corporate gov in M&A

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Corporate governance in mergers & takeovers

  1. 1. Corporate Governance in Mergers & Takeovers<br />Presented by:<br />Ashish Makhija<br />
  2. 2. Corporate Governance<br />Corporate Governance is application of<br />Best management practices<br />Compliance of law <br />Adherence to ethical standards<br />Distribution of wealth<br />Social responsibility for sustainable development of all stakeholders”.<br />
  3. 3. Mergers & Acquisitions <br />1+1=3<br />This equation is the special alchemy of a merger or an acquisition. <br /><ul><li>The key principle is to create shareholder value over and above that of the sum of the two companies.
  4. 4. Two companies together are more valuable than two separate companies.</li></ul>At least, that's the reasoning behind M&A. <br />
  5. 5. Strong Companies will buy other Companies:<br />To create more competitive & cost efficient company.<br />To gain a greater market share.<br />To achieve greater efficiency.<br />
  6. 6. Acquisition<br />Merger<br />
  7. 7. How M & A allows for enhanced cost efficiencies of the new business<br />
  8. 8. Corporate Governance and M&A<br />Corporate Governance = Top Management<br />Profits/Efficiency <br />
  9. 9. Governance is a two way street<br />Corporation is responsible for its<br />stakeholders<br />Governance practices determine the process<br />by which the firm’s stakeholders monitor and control the firm.<br />
  10. 10. Corporate Governance<br />Mechanisms can be broadly grouped into:<br />External mechanism<br />Capital markets<br />Product Markets<br />Managerial Labor market<br />Market for corporate control<br />Internal mechanism<br />The structure and role of the boards<br />The role of the CEO<br />The nature of employment practices<br />Incentive and reward measures<br />
  11. 11. Most important mechanism<br />With an active market for corporate control, shareholders of poorly governed companies can<br />Sell their<br />shares<br />Replace the<br />incumbents<br />Restructure the firm<br />Lowering share prices in market<br />Incentive for outsiders to accumulate control rights<br />
  12. 12. Good Governance after M&A<br />
  13. 13. Human Rights<br />Labor Conditions<br />Support & Respect Internationally Proclaimed H.R<br /> The right to collective bargaining<br />Abolition of child labor<br /> Not complicit in H.R abuses<br />No Discrimination<br />
  14. 14.
  15. 15. Thank You<br />

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