an original work submitted in jims college

1. ACQUISITI
ON

2. What Is an Acquisition?
An acquisition is when one company purchases most or all
of another company's shares to gain control of that
company. Purchasing more than 50% of a target firm's stock
and other assets allows the acquirer to make decisions
about the newly acquired assets without the approval of the
company’s other shareholders.

3. EXAMPLE
Walmart won the bidding war against
Amazon and went onto acquire
a 77% stake in Flipkart for $16 billion.
Following the deal, eBay and
Softbank sold their stake in Flipkart.
The deal resulted in the expansion of
Flipkart’s logistics and supply chain
network.

4.  TYPES OF ACQUISITION
 FRIENDLY ACQUISITION
 REVERSE ACQUISITION
 BACKFLIP ACQUISITION
 HOSTILE ACQUISITION
FRIENDLY
ACQUISITION
REVERS
E
BACKFLIP
HOSTIL
E

5. FRIENDLY ACQUISITION
Friendly Takeover is a type of takeover that is very friendly in nature
as the management of the acquired company, as well as
management of the target company, agrees to the terms and
conditions of the takeover, and takeover is done without any
difficulty, arguments, and fights. An acquirer doesn’t have to do any
plotting or make any strategies against the target company in order
to acquire the same.
Therefore in literal terms, we could say that when the takeover is with
the consent of the board of directors and shareholders of the target
company, then the takeover is called a “Friendly Takeover.”

6.  Example
 In 2014, Facebook Inc. announced the acquisition of the
mobile messaging company, WhatsApp. According to the
statement issued by Facebook, the deal was intended to
“support Facebook and WhatsApp’s shared mission to bring
more connectivity and utility to the world by delivering core
services efficiently and affordably.”
 The acquisition was executed in the form of a friendly
takeover. Facebook acquired all outstanding shares and
options of WhatsApp for $4 billion in cash and 183 million of
Facebook Class A common shares. Additionally, Facebook
assigned more than 45 million restricted shares to
WhatsApp’s employees. The total value of the deal was
estimated at around $19 billion.

7. REVERSE ACQUISITION
An act where a private company purchases a publicly traded
company and shifts its management into the latter.
It also normally involves renaming the publicly traded company. This allo
ws private companies to become publicly traded while avoiding the regulat
ory and financial
requirements associated with an IPO.
In order for a reverse acquisition to happen smoothly, the publicly traded c
ompany is usually shell
corporation, that is, one with only an organizational structure and little or
no activity.

8.  EXAMPLE
Billionaire Warren Buffett’s own Berkshire Hathaway.
Berkshire began as a textile corporation, which eventually
merged with Buffett’s private insurance empire when Buffett
bought a controlling interest in Berkshire’s failing business.
Buffett never changed the name, and later shifted Berkshire
into a holding company that houses a multitude of business
ventures.

9. BACKFLIP ACQUISITION
Backflip Acquisition is a rare type of takeover that
occurs when an acquirer becomes a subsidiary of the
company it purchased. Upon completion of the deal, the
two entities join forces and retain the name of the company
that was bought.

10.  EXAMPLE
 Suppose you are a pizza making company…well know for quality and
taste you are earning profit on daily basis but on the other side there is a
burger naming company which is not at well state making losses, hence
your company decides to buy shares of burger making company to the
extant of majority, which now gives you power to control the company
now after 2 years your pizza company is on loss and the burger one is
gaining profits than their is a chance of burger making company acquire
your share.

11. HOSTILE ACQUISITION
A hostile acquisition is the acquisition of one company
(called the target company) by another (called the
acquirer) that is accomplished by going directly to the
company's shareholders or fighting to replace
management to get the acquisition approved. A hostile
takeover can be accomplished through either a tender
offer or a proxy fight.

12. Example
Pharmaceutical company Sanofi-Aventis's (SNY) acquisition of
Genzyme Corp. Genzyme produced drugs for the treatment of rare
genetic disorders and Sanofi-Aventis saw the company as a means to
expand into a niche industry and broaden its product offering. After
friendly takeover offers were unsuccessful as Genzyme rebuffed Sanofi-
Aventis's advances, Sanofi-Aventis went directly to the shareholders,
paid a premium for the shares, added in contingent value rights, and
ended up acquiring Genzyme.

14.  A Transaction where two firms agree to integrate their operation on a
relatively co equal basis because they have resources and capabilities
that together may create a stronger competitive advantage
 Sometimes it is by an order of government to merge so that ,to sustain
or sometime to compliance with any law

16. A Horizontal merger is a merger between firms that produce and sell
the same products, i.e., between competing firms. ... Horizontal
mergers can be viewed as horizontal integration of firms in a market
or across markets . This is a step to make monopoly in the market so
that they can earn huge revenue .

17. A vertical merger is the merger of two or more companies that
provide different supply chain functions for a common good or
service. Most often, the merger is effected to increase synergies,
gain more control of the supply chain process, and ramp up
business.
A vertical merger often results in reduced costs and increased
productivity and efficiency. This is mainly done where supply
change are big .

18. This type of merger occurs between companies that sell the same
products but compete in different markets. Companies that engage
in a market extension merger seek to gain access to a bigger
market and, thus, a bigger client base. To extend their markets, and
boost there research and development .
THESE TYPE OF MERGER MAINLY HELP FIRM ,AS THEY TRY TO END THEIR
COMPETITION BY MERGING WITH SAME PRODUCT COMPANIES AND CHARGING
HIGH PRICES

19. A merger between firms that are involved in totally unrelated business
activities. There are two types of conglomerate mergers: pure and mixed. Pure
conglomerate mergers involve firms with nothing in common, while mixed
conglomerate mergers involve firms that are looking for product extensions or
market extensions.
Conglomerate

20. . Vodafone and Mannesmann acquisition (1999) - As of January 2021 the largest
acquisition was the takeover of Mannesmann by Vodafone occurred in 2000, and was
worth $203 billion. Vodafone, a mobile operator based in the United Kingdom, acquired
Mannesmann, a German-owned industrial conglomerate company.
This deal made Vodafone the world’s largest mobile operator and set the scene for
dozens of mega deals in the mobile telecommunications space in the years that
followed. This is the largest mergers and acquisitions transaction in history.

21. Oppo, OnePlus merge India R&D operations; to
launch integrated OS next year
Punjab National Bank, United Bank of India and Oriental Bank of Commerce

22. When Google made its move for Motorola in 2012, to
many, a transaction between the two made perfect sense
from a strategic perspective: Google’s Android operating
system was already the second biggest player in the
market, and acquiring Motorola would give it the
opportunity to develop high-quality mobile handsets. The
Google and Motorola Mobility merger failed on so many
levels that it's hard to quantify the extent of the
incompetence that surrounds it. That resulted in it sold
Motorola for $2.91B to Lenovo.
.
HP & AUTONOMY

23. • MERGER ARE BENIFICIAL WHEN COMPANY WANTO EXPRESS THERE PRESENCE IN
THE MARKET You cant success in a new market unless u have full knowledge and experience .
• MERGER is better then acquisition as you get better customer base with positive goodwill
• It promote high level of research and development and open for new ideas
• When business merge they don’t have to stop there activities and hence brand loyality is
maintained
• Mergers are formed for long term basis. On the other hand, joint ventures are formed for short
projects hence are short term based.
Merger are formed for long term basis while acquisition and joint venture are for long duration