Difference in strategic alliance and aquisition & mergers

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3. Broad types of Strategic Alliances
• Licensing Arrangements
The least sophisticated and easiest-to-manage type of
alliance
• Joint Ventures
The creation of a third entity representing the interests
and capital of the partners
• Consortia and Networks
Highly complex linkages among groups of companies
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4. Consortia and Networks
• Multi partner Consortia
Multi partner alliances designed to share an underlying
technology
• Cross-Holding Consortia
Formal groups of companies that own large cross-
holdings and equity stakes in each other
• Industry-Spanning Alliance Networks
Firms sharing knowledge, costs, and risks
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16.  A merger is a transaction that result in the transfer of ownership
and control of a corporation.
 When one company purchases another company of an
approximately similar size. The two companies come together to
become one.
 Two companies usually agree to merge when they feel that they
can do something together that they can not do one their own.
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17.  Rajasthan bank and ICICI bank
 Arcelor Mittal
 Renault and Nissan
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19.  A merger occurring between companies producing
similar products, goods and offerings similar services.
 This type of merger occurs frequently as a result of
larger companies attempting to create more effective
economies of scale.
• Example- Boeing-McDonnell Douglas
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20.  A merger between two companies producing different
goods and services for one specific finished products.
 The merger of the firm that have actual or potential
buyer-seller relationship.
• Example- Car manufacture purchasing a tire company.
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21. • A merge between firms that are involved in totally interrelated business
activity.
• Two types of conglomerate merger are:
 Pure conglomerate merger- It involve firms with nothing common.
 Mixed conglomerate merger- It involves firms that are looking for product
extensions or market extensions.
• Example- PepsiCo-Pizza Hut; Proctor & Gamble-Clorox.
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22. • Ways of merger – A merger can take place in
following ways:
By purchasing of assets
 By purchase of common shares
 By exchanging of shares for assets
 By exchanging of shares for shares
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23. By purchase of
assets
By purchase of
common shares
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24. By exchanging of
shares for assets
By exchanging of
shares for shares
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25. Reasons
of
merger
Futur
e
goals
Mutu
al
benefi
ts
Maxim
izing
profits
Expans
ion of
busine
ss
Econo
my of
scale
Increase
market
share
Cost
maxi
mizati
on
Diversi
ficatio
n of
risk
Goodwi
ll
Product
improvem
ent
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26. Difference between Strategic alliance
and M&A
• Acquisitions
Acquisitions and mergers are effectively the same thing. Most mergers are really
one company acquiring the other. In this acquisition process, the acquiring
company receives the good and bad, the positive and the negative resources,
liabilities, and reputation. The acquiring organization receives all assets and
liabilities of the acquired organization.
• Alliances
Alliances, generally strategic to an organization’s short or long-term plans, are
contractual relationships wherein both organizations remain independent while
collaborating to develop a mutually-beneficial result within a specific scope
outlined in the contractual agreement. A very simple example would be the cross
promotion efforts that are regularly employed by Hollywood ’s movie producers
and various companies that sell their products or services directly to consumers.
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