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1. Merger Of Companies
Prepared by Eqbal Habibi
4th Sem (BBM)

2. *
The combining of two or more
companies.

3. *
1. Conglomerate
2. Horizontal Merger
3. Market Extension Mergers
4. Product Extension Mergers
5. Vertical Merger

4. *
Does not require cash.
Accomplished tax-free for both parties.
The company can run out of one headquarters instead of two separate
executive offices.
This can save time and money for the new company.
The competition of the companies may face with others throughout the
world.
Two companies that merge from the same country can do better at facing
international competition than two small companies.
The company may also choose to reduce the amount of staff after the
merger.

5. *
*Diseconomies of scale if business become too large,
which leads to higher unit costs.
*Clashes of culture between different types of
businesses can occur.
*May need to make some workers redundant, especially
at management levels - this may have an effect on
motivation.

6. *
Stage I – Application to the court
Stage II - Direction by the court
Stage III – Notice of compromise and arrangement
Stage IV – Approval of the scheme by creditors/members-
conditions
Stage V – Court to be satisfied that scheme is bonafide.
Stage VI – Sanction of the Scheme
Stage VII – Filing of the order of the court with the Registrar

7. *
Synergy
Growth
Increase Supply-Chain Pricing Power
Eliminate Competition
Improve Competitive Position
Acquire Resources and Skills