merger types of mergers mega merger of Bank of Baroda , Vijaya Bank and Dena bank impact of mega merger government plan behind mega merger strategy and objectives of mega merger

1. MEGA MERGER
By Deepika Parwani

2. INDEX
 Introduction
 Objectives
 Research methodology
 Analysis and interpretation
 Conclusion and suggestion

3. INTRODUCTION
 Why business combine ?
1. Synergy
2. Diversification
3. Growth
4. Eliminate competition

4. BUSINESS MERGER
AMALGAMATION
COMBINATION ACQUISITION
TAKEOVERS

5. • When two or more
companies combines
into one company
• May merger with
existing company
• Form new company
MERGER
EXAMPLE :- TATA STEEL – CORUS

6. •A absorption is combination of
two or more companies into
one existing company
•Absorption of Tata Fertilizers
Ltd. (TFL) by Tata Chemicals
Ltd. (TCL)
Merger through
Absorption
•A consolidation is a
combination of two or more
companies into a new company
•Hindustan Computers Ltd. ,
Hindustan Instruments Ltd. ,
Indian Software ltd. ,
Reprograhic Ltd. Merged to
form HCL Ltd.
Merger through
Consolidation

7. TYPES OF MERGER
 Horizontal merger
- Brook Bond Lipton India Ltd.
 Vertical merger
- Pixar & Disney
 Market extension merger
- Dell’s Alienware Gaming Laptops
 Product extension merger
- Sun And Ski Apparel
 Conglomeration merger
- Tata-Sky

8. OBJECTIVES
To study the impact of mega merger
To study the government plan behind
this mega merger
To study the strategy behind this mega
merger
To study the objectives of this mega
merger

9. RESEACH METHODOLOGY
 Data –
There are 2 types of data –
1 Primary data
2 Secondary data
This research is based on secondary data.
 Research –
This research is the descriptive type of
research.
 Research Method –
This descriptive research method is case
study method.

10. ANALYSIS
 PSU bank mega merger -
Bank Of Baroda
+
Vijaya Bank
+
Dena Bank
 PSGIC’s mega merger –
National Insurance Company
+
United India Insurance
+
Oriental Insurance Company

11. PSU BANK MEGA MERGER
 Government plan-
- To creating 3-4 global sized bank
- To work on three tier system
 Strategy behind mega merger –
- Narasimhan committee- ii report 1998
- Assocham survey
- 2 strong + 1 weak bank

12.  Objectives of mega merger –
- To make the large entity
- To subsume the weaker entity
 Terms of mega merger –
- SWAP ratio
- Employees
 Impact of mega merger-
ADVANTAGES DISADVANTAGES
• 3RD largest bank in India Tough to manage issue
pertaining to human resource
•Stronger and globally
competitive
The local identity of small
banks won’t be that prominent
Recapitalization need from the
government reduce

13. PSGIC’s MERGER
 Government plan –
- To create one large and strong entity
 Strategy behind mega merger –
- Merging the strong PSU’s
 Objectives of mega merger –
- To subsume the weaker entity
- To make the larger entity
 Impact of mega merger –
- Reduce competition
- Improve overall profitability
- Monopolistic problem

14. CONCLUSION
PSU Bank Mega Merger PSGIC’s Mega Merger
Merger Of Bank Of Baroda, Vijaya
Bank And Dena Bank
Merger Of National Insurance, United
India Insurance, Oriental India
Insurance Company
Strategy of 2 strong + 1 weak bank Strategy of merging the strong PSU’s
Advantages –
- technology up gradation
- 3rd largest bank
- stronger and globally competitive
Advantages
- Reduce competition
- Improve overall profitability
- Improvement of solvency level
Disadvantages-
- Tough to manage issue pertaining
to hr
Disadvantages-
- Monopolistic problem

15. SUGGESTION
 PSU Bank Mega Merger –
Suggestion by raghuram rajan –
the government strategy
behind merger is to merge 2 strong + 1week bank
but raghuram rajan says to merge 3 strongest
bank to improve the banking condition in India
then help weak bank who came under PCA.

16.  PSGIC’ s Mega Merger –
Suggestion by Rajiv Kumar , MD and CEO,
universal Sompo General Insurance-
This merger will
reduce competition but it will create a
monopolistic situation and will increase their
bargaining power and private insurers have to
take account of this.

17. BIBLIOGRAPHY
 www.livemint .com
 wishfin.com
 blog.ipleader.in
 m.economictimes.com
 Study IQ Education

18. THANK YOU