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COOPERATE RESTRUCTURING, CROSS BORDER
MERGER AND ACQUISITIONS AND CONCEPTS
OF LBO
GROUP MEMBERS:
AJEESH MOOSAKUTTY NIDHEESH
THOYYIB NISHAM
SAHIR A
CORPORATE RESTRUCTURING
Restructuring is a process by which a firm does analysis of itself at a
point.
Alters what it owes and owns, refocuses itself to specific task of
Performance Improvement.
Restructuring could also be radical alter in firms' Capital Structure, Asset
Mix, Organization so as to enhance Firms' Value.
AREAS OF CORPERATE RESTRUCTUING
1. FINANCIAL RESTRUCTURING:
Involves Decisions relating to Merger, Joint Venture,
Acquisition And Strategic Alliances. Deals with Capital Base and Raise In
Finance.
2. TECHNOLOGICAL RESTRUCTURING:
Involves Investment in R&D and alliance with overseas
companies for Technological Strength.
-continue
3. MARKET RESTRUCTURING:
Involves decisions regarding product segments where
company operates based on Core Competency.
4. MANPOWER RESTRUCTURING:
Involves establishing Internal Structure and process for
improvement the Capacity Of People in the organization to respond
changes.
TECHNIQUIES OF CORPORATE
RESTRUCTURING
1. MERGER AND AMALGAMATION:
Merger can be said as a fusion of two companies to achieve
Expansion And Diversification.
Amalgamation is an arrangement for bringing assets of two
companies under control of one company which may or may not be
one of the original company.
-continue
2. TAKEOVERS OR ACQUISITIONS:
Acquiring Control over another business to consolidate and
acquire large share of the market. Its control over the other
company by acquiring directly assets or indirectly management
control.
3. JOINT VENTURES:
Two or more business parties agreed to share responsibilities
in the agreed manner by Providing Risk Capital, Technology, Patent
/Trademark/Brand Name And Access To Market for Profit.
-continue
4. BUSINESS ALLIANCE:
Basic idea is to facilitate Innovative Ideas and Techniques
while implementing large projects, with common objective of reduction
in Cost And Time, and sharing the resultant benefits in proportion to
Contribution made by each party in Achieving Targets.
5. FOREIGN FRANCHISES:
Immediate access to business operation and technology in
profitable fields of operations. It exceeds range from marketing to
distribution of goods and services.
-continue
6. INTELLECTUAL PROPERT RIGHTS:
Buying of Intangible Assets like Patents, Trademarks, Brands,
Copyrights etc. instead of investing time and money on R&D for New
Patents or other Intangible assets for higher sales, economies of scale
and profits.
LEVERAGE BUY-OUTS
“Acquisition of an operating company with funds derived primarily
from debt financing that is based on the assets and asset or cash
flow target (acquired) company”
Concept of Buy out process that has developed since 1970s.
Leverage Buyouts also known as “Management Buy-Outs”.
DEFINITON ON LBO
Acquisition, financial largely by borrowings of all assets of a public
company by small group of investors.
In LBO, debt financing typically represent 50 percent or more of
purchase price.
The debt is secured by the assets of the acquired firm and is usually
amortized over a period of less than 10 years.
CONCEPT OF LBO
In LBO programme, the acquiring group consists of small number of
persons or organization sponsored by buy-outs or investment
bankers.
 These groups acquire target firms and takes target firm private.
Buyout group may or may not include current management of the
target firm.
If Current Management include in this group its regarded as
‘Management Buy-Outs’.
MOTIVES OF CROSS MERGER AND
ACQUISITION
1. Growth Orientation:
To escape small home market, to extend market served, to achieve
economy of scale.
2. Access to Inputs:
To access raw materials to ensure consistent supply, to access
technology, to access latest innovation, to access cheap and
productive labor.
3. Exploit unique advantage:
To exploit the company’s brand, reputation, design,, production and
management capabilities.
4. Defensive:
To diversify across the products and markets to reduce earnings
volatility to reduce dependence on exports, to avoid home country
political & economic instability.
5. Response to Client needs:
To provide home country clients with services for their overseas
subsidiaries e.g.: banks and accountancy firms.
6. Opportunism:
To exploit temporary advantages e.g. a favorable exchange rate
making foreign acquisition cheap.

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CROSS BORDER M&A AND COPERATE RESTRUCTURING

  • 1. COOPERATE RESTRUCTURING, CROSS BORDER MERGER AND ACQUISITIONS AND CONCEPTS OF LBO GROUP MEMBERS: AJEESH MOOSAKUTTY NIDHEESH THOYYIB NISHAM SAHIR A
  • 2. CORPORATE RESTRUCTURING Restructuring is a process by which a firm does analysis of itself at a point. Alters what it owes and owns, refocuses itself to specific task of Performance Improvement. Restructuring could also be radical alter in firms' Capital Structure, Asset Mix, Organization so as to enhance Firms' Value.
  • 3. AREAS OF CORPERATE RESTRUCTUING 1. FINANCIAL RESTRUCTURING: Involves Decisions relating to Merger, Joint Venture, Acquisition And Strategic Alliances. Deals with Capital Base and Raise In Finance. 2. TECHNOLOGICAL RESTRUCTURING: Involves Investment in R&D and alliance with overseas companies for Technological Strength.
  • 4. -continue 3. MARKET RESTRUCTURING: Involves decisions regarding product segments where company operates based on Core Competency. 4. MANPOWER RESTRUCTURING: Involves establishing Internal Structure and process for improvement the Capacity Of People in the organization to respond changes.
  • 5. TECHNIQUIES OF CORPORATE RESTRUCTURING 1. MERGER AND AMALGAMATION: Merger can be said as a fusion of two companies to achieve Expansion And Diversification. Amalgamation is an arrangement for bringing assets of two companies under control of one company which may or may not be one of the original company.
  • 6. -continue 2. TAKEOVERS OR ACQUISITIONS: Acquiring Control over another business to consolidate and acquire large share of the market. Its control over the other company by acquiring directly assets or indirectly management control. 3. JOINT VENTURES: Two or more business parties agreed to share responsibilities in the agreed manner by Providing Risk Capital, Technology, Patent /Trademark/Brand Name And Access To Market for Profit.
  • 7. -continue 4. BUSINESS ALLIANCE: Basic idea is to facilitate Innovative Ideas and Techniques while implementing large projects, with common objective of reduction in Cost And Time, and sharing the resultant benefits in proportion to Contribution made by each party in Achieving Targets. 5. FOREIGN FRANCHISES: Immediate access to business operation and technology in profitable fields of operations. It exceeds range from marketing to distribution of goods and services.
  • 8. -continue 6. INTELLECTUAL PROPERT RIGHTS: Buying of Intangible Assets like Patents, Trademarks, Brands, Copyrights etc. instead of investing time and money on R&D for New Patents or other Intangible assets for higher sales, economies of scale and profits.
  • 9. LEVERAGE BUY-OUTS “Acquisition of an operating company with funds derived primarily from debt financing that is based on the assets and asset or cash flow target (acquired) company” Concept of Buy out process that has developed since 1970s. Leverage Buyouts also known as “Management Buy-Outs”.
  • 10. DEFINITON ON LBO Acquisition, financial largely by borrowings of all assets of a public company by small group of investors. In LBO, debt financing typically represent 50 percent or more of purchase price. The debt is secured by the assets of the acquired firm and is usually amortized over a period of less than 10 years.
  • 11. CONCEPT OF LBO In LBO programme, the acquiring group consists of small number of persons or organization sponsored by buy-outs or investment bankers.  These groups acquire target firms and takes target firm private. Buyout group may or may not include current management of the target firm. If Current Management include in this group its regarded as ‘Management Buy-Outs’.
  • 12. MOTIVES OF CROSS MERGER AND ACQUISITION 1. Growth Orientation: To escape small home market, to extend market served, to achieve economy of scale. 2. Access to Inputs: To access raw materials to ensure consistent supply, to access technology, to access latest innovation, to access cheap and productive labor.
  • 13. 3. Exploit unique advantage: To exploit the company’s brand, reputation, design,, production and management capabilities. 4. Defensive: To diversify across the products and markets to reduce earnings volatility to reduce dependence on exports, to avoid home country political & economic instability.
  • 14. 5. Response to Client needs: To provide home country clients with services for their overseas subsidiaries e.g.: banks and accountancy firms. 6. Opportunism: To exploit temporary advantages e.g. a favorable exchange rate making foreign acquisition cheap.