Mergers and Acquisitions often called as M&A in short form. Companies globally adopt these strategies to grow or survive in the competitive market.

1. MERGERS&
ACQUISITIONS
PresentedbyEntersliceFintech

2. MEANINGOFMERGER
&ACQUISITION
Thereexistsconfusionbetweenthemeaningofmergerandacquisitionandalotmany
times,bothareconsideredthesame.However,thereisaconsiderabledifferencebetween
thesetwoterms.
Mergerinvolvescombiningorcomingtogetheroftwoentitiesandformationofthetwointo
asingleentity.Acquisitiontakesplacewhenoneentitybuysanotherentityandthebuyer
entitycombinestheotherentitywithitself.Both,mergerandacquisition,representorganic
growthprocess.

3. Reasonsfor
Mergersand
Acquisitions
TO ELIMINATE
COMPETITION
FOR ESTABLISHING A
BIGGER MARKET
SHARE;
SETTING OFF THE
LOSSES OF ONE
COMPANY WITH THE
PROFIT OF THE OTHER.
CREATING A
POWERFUL BRAND;

4. BENEFITSOFM&A
ADVANTAGES OF MERGERS AND ACQUISITIONS

5. INCREASEIN
SIZE
CONSTANTLY
INNOVATING AND
CREATING IDEAS
Viamergeroracquisition,companies
canincreasetheirsizemanifold,which
otherwisecouldhavetakenyears.
Thesestrategictoolsarequickerwayof
increasingthecompanysizead
operations.

6. REDUCED
COMPETITION
Mergersandacquisitionsareaquickwayforreducingthecompetitionasthey
allowforcombiningstrengthswithone’sowncompetitors.Thiswaythe
companytapstheconsumerbaseoftheother.Themergersandacquisitionsaim
atwinningmoreconsumersbysynergizingtheirstrengthsandcuttingthe
competition.

7. INCREASEDPOWER CUSTOMERS
ENGAGEMENT
Whentwocompaniescombine
theirpower,theybecome
dominantplayersinthemarket.
Thiswaytheycandominatethe
otherplayersastheynowhave
abiggermarketshare.
Attractingmorecustomersalso
becomeseasier.

8. MergersandAcquisitionsalsohavethetaxbenefits.
Thelossesofonecompanycanbewrittenoffagainst
theprofitoftheother,therebyreducingthenet
taxableincome.Also,foreignentitieswithhigh
corporatetaxcanuseitsoverseasmerged/acquired
company’sdomestictaxpaymentsysteminorderto
payloweramountoftax.
TAX BENEFITS

9. Sincemergersandacquisitionsmaketwomarket
playerscometogether,theirresourcesofresearch
andmarketvisibilitycombine.Thiswaytheycan
comeupwithbetterandmoreinnovativeideasof
attractingconsumersandincreasingtheirmarket
share.
BETTERRESEARCHANDVISIBILITY

10. TYPESOF
MERGERS
HORIZONTAL MERGER
Thisoccurswhentwoormore
companieswhichareindirect
competitionandindulgeinidentical
productsandmarketsbases,merge.
VERTICAL MERGER
Thisisthemergerbetweena
companyanditssupplierora
companyanditscustomer.
CONGENERIC MERGER:
Thisisthemergerbetween
companiesthatoffercomplimentary
productstothesameconsumer
base.Thiswaythenewcompanyis
theexpandedversionofthemerged
companies.

11. CONGLOMERATE
Thisisthemergerofcompaniesthathave
completelydifferentbusinessfieldsandhaveno
commonground
MARKET-EXTENSION MERGER
Thisisthemergerofthecompaniesthatsell
similarproductsindifferentmarkets.
PRODUCT-EXTENSION MERGER
Thisisthemergerbetweencompaniesthatsell
relatedproductsindifferentmarkets.

12. APPLICABILITYOF
COMPANYLAW
WHAT'S IN STORE?

13. MERGERS
Thestrategicarrangementofmergerbetweenthe
company,theshareholdersandthecreditorsaregoverned
bySections390to394oftheCompaniesAct,1956and
Sections230-234oftheCompaniesAct,2013.
ACQUISITIONS
Acquisitionofexistingsharesofthetargetcompany
Subscriptiontonewsharesofthetargetcompany
AspertheprovisionsoftheIndianlaw,acquisitioncantake
placeinthefollowingtwoforms:

14. PROCEDUREFORMERGERSANDACQUISITIONSININDIA
TheveryfirststeptoM&Aistoscrutinizethe
MemorandumofAssociation(MOA)ofthe
companyproperlytoconductasearchandverify
whetherthepowerofmergerisbestowedonor
not.
EXAMINETHEMOAOFTHECOMPANY
TheBoardoftheDirectorofboththeinvolved
companiesneedstosubmitaconfirmationonthe
draftofthemergerproposal.Besides,itisalso
requiredtopasstheresolutiontoauthorizeits
keymanagerialpersonneltocarryonthematter.
DRAFTINGOFMERGERPROPOSAL
Secondly,whenyouaregoingtoentermergers
andacquisitions,youmustinformthestock
exchangeofthesame.Further,youneedtosend
copiesofresolutions,orders,andnoticestothe
stockexchangeonatimelybasis.
INFORMTHESTOCKEXCHANGE
OncetheBoardofDirectorshaveconfirmed,the
mergercompanyneedstosendanapplicationto
theHighCourtoftheconcernedstatewherethe
companyhasitsheadquarter.
FILINGAPPLICATIONTOTHEHIGHCOURT
1 2
3 4

15. IftheHighCourthasgrantedtheapproval,the
companymustsendanoticetoallthecreditors
andshareholdersregardingthemeetingtobe
held21daysprior.
NOTICETOCREDITORSAND
SHAREHOLDERS
Next,theprocessofmergingofassetsand
liabilitiesofbothcompanywilltakeplace
MERGINGOFASSETSANDLIABILITIES
Thecompanyneedstofileatrulycertifiedcopy
oftheorderfromtheHighCourtwiththe
RegistrarofCompanieswithintheprescribed
limitasspecifiedbytheHighCourt.
FILEORDERSWITHTHEROC
Lastly,whenthecompanieshavebeenmerged
andgotthestatusofaseparatelegalentity,
thenthecompanyiseligibletoissueitsshares
anddebenturesonthestockexchangeafter
listing
ISSUANCEOFSHARESANDDEBENTURES
5 6
7 8
PROCEDUREFORMERGERSANDACQUISITIONSININDIA

16. CONCLUSION
MergersandAcquisitionsarestrategictoolsusedby
companiesforimmediatetremendousgrowth.Thecompanies
usethestrengthsofeachotherforgettingalargerconsumer
baseandenteringmoremarkets.Thelegalaspectsofgetting
intoamergeroracquisitionarequitecomplicated.These
processesareusuallyundertakenbyprofessionalswhohold
yearsofexpertiseinthefield.Ourteamofexpertsiswell-
versedwiththeentireprocedureofmergersandacquisitions.

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