Corporate restructuring involves changing aspects of a company such as its capital structure, operations, or ownership. It can take various forms such as mergers, acquisitions, divestitures, spin-offs, etc. A unique example is Reliance Industries' family arrangement scheme in 2006, which segregated businesses and assets between two brothers. The scheme demerged RIL's businesses into four new companies. RIL shareholders received shares in the new companies, increasing the total value of their holdings. This allowed clean separation of the businesses and provided benefits to shareholders.
The Concept
A stable strategy arises out of a basic perception by the management that the firm should concentrate on using its present resources for developing its competitive strength in particular market areas.
In simple words, stability strategy refers to the company’s policy of continuing the same business and with the same objectives
A firm pursues stability strategy when
1. It continues to serve the public in the same product or service, market, and function sectors as defined in its business definition.
2. Its main strategic decisions focus on incremental improvement of functional performance.
2. Corporate Restructuring is the process of redesigning one or more aspects of a company.
3. The process of reorganizing a company may be implemented due to a number of different factors, such as positioning the company to be more competitive, surviving a currently adverse economic climate, or acting on the self confidence of the corporation to move in an entirely new direction.
Corporate restructuring is the process of reorganizing aspects of a company to make it more competitive or move in a new direction. This document discusses various types of corporate restructuring such as mergers, acquisitions, consolidations, joint ventures, buybacks, delistings, demergers, spin-offs, split-ups, equity carve-outs, and divestitures. Examples are provided for many of these types including the Pepsi spin-off of its restaurant businesses and Reliance Industries split into five listed companies. The goals and processes involved in corporate restructuring are also outlined.
This document discusses corporate restructuring and quality improvement using Six Sigma. It provides an overview of corporate restructuring, including the process, types, needs, objectives and tools. Quality improvement using Six Sigma is then explained, along with its methodology. Finally, the use of Six Sigma at Wipro Technologies is examined, outlining how Wipro implemented Six Sigma and the benefits it reaped.
This document discusses corporate restructuring and mergers and acquisitions. It defines corporate restructuring as fundamental changes to a company's business, financial, or ownership structure to increase shareholder value. The document outlines various restructuring techniques including expansions through mergers, acquisitions, and alliances, and divestments through spin-offs, sell-offs, and liquidations. It also discusses key factors in evaluating mergers such as exchange ratios and the legal procedures for mergers and acquisitions in India according to the Companies Act of 1956.
Merger & Acquisition, Insurance and SecuritisationRohit Kumar
This document provides an overview of mergers and acquisitions (M&A) in India. It defines key terms like amalgamation, acquisition, and takeover. It notes that M&A deal value in India was US$62 billion in 2010 and US$54 billion in 2011. The main differences between an amalgamation and takeover are that in an amalgamation, the amalgamating company loses existence while in a takeover, both companies remain standing. The document discusses types of mergers like horizontal, vertical, conglomerate, and concentric. It provides examples of reasons for M&As like synergies, diversification, taxation benefits, and growth opportunities.
This document discusses various types of corporate restructuring. It defines mergers, acquisitions, takeovers, joint ventures, and strategic alliances as types of expansion. Contraction types include sell offs, spin offs, split offs, and split ups. Mergers involve two companies combining to form one, and can be through absorption or consolidation. Reasons for mergers include gaining competitive advantages, diversifying products, and cutting costs. Leveraged buyouts involve acquiring a company mostly through debt financing. The document also discusses divestitures and demergers as forms of corporate restructuring.
1) basic concepts of corporate restructuring (1)Vikeyiel Rhetso
Corporate restructuring involves changes to a company's capital structure, operations, or ownership outside the ordinary course of business. Reasons for restructuring include sales enhancement, improved management, tax benefits, and leverage gains. There are two main types of restructuring - operational restructuring like workforce reductions, and financial restructuring like leveraged buyouts. Mergers, acquisitions, divestitures and spin-offs are common forms of corporate restructuring.
This document discusses various aspects of business restructuring including definitions, importance, advantages, reasons, and types. It defines business restructuring as altering a company's structure by changing its asset or liability structure. Business restructuring helps companies identify opportunities, survive competition, and grow internally and externally. It provides strategic, economic, and managerial benefits. Common reasons for restructuring include reducing costs, improving competitiveness, and utilizing excess capacity. The document also discusses types of restructuring like acquisitions, mergers, demergers, and divestitures.
The Concept
A stable strategy arises out of a basic perception by the management that the firm should concentrate on using its present resources for developing its competitive strength in particular market areas.
In simple words, stability strategy refers to the company’s policy of continuing the same business and with the same objectives
A firm pursues stability strategy when
1. It continues to serve the public in the same product or service, market, and function sectors as defined in its business definition.
2. Its main strategic decisions focus on incremental improvement of functional performance.
2. Corporate Restructuring is the process of redesigning one or more aspects of a company.
3. The process of reorganizing a company may be implemented due to a number of different factors, such as positioning the company to be more competitive, surviving a currently adverse economic climate, or acting on the self confidence of the corporation to move in an entirely new direction.
Corporate restructuring is the process of reorganizing aspects of a company to make it more competitive or move in a new direction. This document discusses various types of corporate restructuring such as mergers, acquisitions, consolidations, joint ventures, buybacks, delistings, demergers, spin-offs, split-ups, equity carve-outs, and divestitures. Examples are provided for many of these types including the Pepsi spin-off of its restaurant businesses and Reliance Industries split into five listed companies. The goals and processes involved in corporate restructuring are also outlined.
This document discusses corporate restructuring and quality improvement using Six Sigma. It provides an overview of corporate restructuring, including the process, types, needs, objectives and tools. Quality improvement using Six Sigma is then explained, along with its methodology. Finally, the use of Six Sigma at Wipro Technologies is examined, outlining how Wipro implemented Six Sigma and the benefits it reaped.
This document discusses corporate restructuring and mergers and acquisitions. It defines corporate restructuring as fundamental changes to a company's business, financial, or ownership structure to increase shareholder value. The document outlines various restructuring techniques including expansions through mergers, acquisitions, and alliances, and divestments through spin-offs, sell-offs, and liquidations. It also discusses key factors in evaluating mergers such as exchange ratios and the legal procedures for mergers and acquisitions in India according to the Companies Act of 1956.
Merger & Acquisition, Insurance and SecuritisationRohit Kumar
This document provides an overview of mergers and acquisitions (M&A) in India. It defines key terms like amalgamation, acquisition, and takeover. It notes that M&A deal value in India was US$62 billion in 2010 and US$54 billion in 2011. The main differences between an amalgamation and takeover are that in an amalgamation, the amalgamating company loses existence while in a takeover, both companies remain standing. The document discusses types of mergers like horizontal, vertical, conglomerate, and concentric. It provides examples of reasons for M&As like synergies, diversification, taxation benefits, and growth opportunities.
This document discusses various types of corporate restructuring. It defines mergers, acquisitions, takeovers, joint ventures, and strategic alliances as types of expansion. Contraction types include sell offs, spin offs, split offs, and split ups. Mergers involve two companies combining to form one, and can be through absorption or consolidation. Reasons for mergers include gaining competitive advantages, diversifying products, and cutting costs. Leveraged buyouts involve acquiring a company mostly through debt financing. The document also discusses divestitures and demergers as forms of corporate restructuring.
1) basic concepts of corporate restructuring (1)Vikeyiel Rhetso
Corporate restructuring involves changes to a company's capital structure, operations, or ownership outside the ordinary course of business. Reasons for restructuring include sales enhancement, improved management, tax benefits, and leverage gains. There are two main types of restructuring - operational restructuring like workforce reductions, and financial restructuring like leveraged buyouts. Mergers, acquisitions, divestitures and spin-offs are common forms of corporate restructuring.
This document discusses various aspects of business restructuring including definitions, importance, advantages, reasons, and types. It defines business restructuring as altering a company's structure by changing its asset or liability structure. Business restructuring helps companies identify opportunities, survive competition, and grow internally and externally. It provides strategic, economic, and managerial benefits. Common reasons for restructuring include reducing costs, improving competitiveness, and utilizing excess capacity. The document also discusses types of restructuring like acquisitions, mergers, demergers, and divestitures.
The document discusses different types of venture capital including early stage financing, expansion financing, and acquisition/buyout financing. It also describes the key features and advantages/disadvantages of venture capital. Venture capital is a type of private equity typically provided for early-stage, high-potential, and growth companies. It comes from institutional investors and high-net-worth individuals and is pooled by dedicated investment firms.
- Share repurchases, also known as buybacks, refer to a company purchasing its own shares from shareholders. This provides an exit option for shareholders and can maximize shareholder wealth.
- Companies may engage in buybacks to correct over-capitalization, shore up management stakes, or provide an exit mechanism for shareholders. Regulations in India govern buybacks by listed and unlisted companies, requiring compliance with pricing guidelines, timelines, and other procedures.
Corporate restructuring refers to changes in ownership, business mix, assets, and alliances to enhance shareholder value. It involves ownership restructuring, business restructuring, and asset restructuring through mergers, acquisitions, divestitures, and other methods. Mergers can be horizontal, vertical, or conglomerate. Motives for restructuring include limiting competition, utilizing underused resources, achieving economies of scale, and gaining access to new markets. Legal procedures and valuation methods are required for mergers and acquisitions.
Role of mib in mergers and acquisitinsKavita Patil
The document discusses the role of merchant bankers in mergers and acquisitions. It begins by defining mergers and acquisitions, describing different types of each. It then discusses the statutory framework governing M&As in India and the tax implications. The role of merchant bankers includes conducting due diligence, arriving at valuations, advising on transaction structures, and facilitating the process. Key activities involve negotiations, board approvals, drafting schemes of arrangement, and regulatory filings. Valuation methods include DCF analysis, comparable companies, and sum-of-parts. Debt financing is also considered through leveraged buyout analysis.
This document provides an overview of mergers and acquisitions. It discusses various forms of restructuring like expansions, sell-offs, and changes in ownership structure. It also describes different types of mergers like horizontal, vertical, and conglomerate mergers. The document outlines reasons for merger movements in the late 19th century, 1920s, 1940s-1950s, and 1960s-1970s, often linked to economic and technological changes. It discusses the impacts of M&A activity on industry concentration. Finally, it briefly touches on risk arbitrage related to M&A deals.
This document provides an overview of mergers and acquisitions. It discusses various forms of restructuring like expansions, sell-offs, and changes in ownership structure. It also describes different types of mergers like horizontal, vertical, and conglomerate mergers. The document outlines reasons for merger movements in the late 19th century, 1920s, 1940s-1950s, and 1960s-1970s, often linked to economic and technological changes. It discusses the impacts of M&A activity on industry concentration. Finally, it briefly touches on risk arbitrage related to M&A deals.
The document discusses corporate restructuring, which involves modifying a company's capital structure or operations when experiencing significant problems or financial jeopardy. It defines corporate restructuring and introduces the topic. It then discusses types of restructuring like financial and organizational restructuring. It outlines reasons for restructuring like change in strategy, lack of profits, or reverse synergy. It also covers characteristics, aspects to consider, and types of restructuring transactions like mergers, divestments, takeovers and more. Finally it discusses benefits of restructuring like increased market share, reduced competition, economies of scale and tax benefits.
Top mergers acquisitions in telecom industryAnit Vattoly
The document discusses mergers and acquisitions in the telecom industry. It provides details about the merger between Vodafone India and Idea, two major telecom companies in India. Vodafone is a large multinational telecom company headquartered in London, with mobile operations in 26 countries. Idea is the third largest wireless operator in India, headquartered in Mumbai. The document then discusses some of the top mergers and acquisitions that have occurred in the telecom industry.
This document discusses various types of corporate restructuring methods including mergers, acquisitions, strategic alliances, joint ventures, demergers, divestitures, leveraged buyouts, employee stock option plans, sell-offs, equity carve-outs, and spin-offs. It provides details on each type such as definitions, examples, and reasons for using certain methods. Key points include that mergers combine two companies, acquisitions involve purchasing another company, and strategic alliances and joint ventures allow companies to partner together without fully merging.
Corporate restructuring involves changes to a company's ownership, structure, or operations. There are several forms of restructuring, including expansion, diversification, collaboration, spinning off business units, and mergers, amalgamations, and acquisitions. Mergers involve one company acquiring another, while amalgamations combine two companies into a new entity. Acquisitions occur when one company gains control of another. Determining the appropriate exchange ratio of shares is a key part of mergers and amalgamations. The process also requires approval from boards of directors, shareholders, creditors, and sometimes courts or regulatory bodies. Diversification grows a company through new products or services, while disinvestment sells non-profitable business units to focus resources.
This document discusses mergers and acquisitions. It defines mergers as a combination of two or more companies into one surviving company, while acquisitions involve purchasing a controlling interest in another company. The document outlines different types of mergers like horizontal, vertical, and conglomerate mergers. It also discusses leveraged buyouts, hostile takeovers, and bailout takeovers. Some benefits of mergers and acquisitions mentioned include gaining cost efficiency, entering new markets, and improving competitiveness. Potential causes of failures include cultural differences between companies and defensive or ego-driven motivations. Several major mergers and acquisitions involving Indian companies are also briefly outlined.
This content is designed to develop understanding of different types of mergers and acquisitions and the process involved in executing their deals and also develop an ability to understand factors influencing the valuation of a business and different methods used in Business Valuation.
Corporate restructuring is the process of redesigning aspects of a company, such as its capital structure, asset mix, or organization, in order to increase competitiveness or survive adverse economic conditions. Reasons for restructuring include positioning the business strategically, responding to the economy, growth, technology changes, or government policy. Restructuring can involve mergers, acquisitions, divestitures, joint ventures, leveraged buyouts, or management buyouts. Limitations to successful restructuring include lack of management commitment, resistance to change, poor communication, and insufficient resources.
The document discusses the integration of a merger for shareholders. It defines a merger as the combination of two or more companies where one survives and the other is dissolved. Mergers allow for synergy that can increase shareholder value through operating efficiencies and economies of scale. The document outlines the merger process and provides examples of mergers in different industries. It discusses the strategic and business reasons for mergers, including positioning for future opportunities, filling strategic gaps, bargaining purchases, and diversification.
A merger occurs when one company is absorbed by another, while an acquisition takes place when a larger company takes over the shares and assets of a smaller company. Mergers and acquisitions allow companies to achieve economies of scale, gain market share, and increase competitiveness. However, they can also lead to integration difficulties and excessive debt if not managed properly. Some major mergers and acquisitions in India include the Reliance-BP deal, Essar exiting Vodafone, and Vedanta acquiring Cairn India. Reverse mergers allow private companies to go public by acquiring shell public companies.
This document discusses various retrenchment strategies that a company can adopt when it aims to reduce business operations and expenses to reach a more stable financial position. It describes turnaround, dis-investment, and liquidation strategies. Turnaround strategy aims to convert a loss-making unit into a profitable one by cutting expenses and unproductive activities. Dis-investment strategy involves selling off business units that are underperforming. Liquidation strategy is the extreme case where a company decides to sell its entire business operations. The document provides reasons for and processes of implementing each retrenchment strategy through case studies.
This document discusses mergers and acquisitions. It defines mergers and acquisitions, provides examples of each, and discusses the different types including horizontal, vertical, conglomerate, and cross-border mergers and acquisitions. It also outlines the main methods of payment in mergers and acquisitions including cash, security, and leveraged buyouts. Finally, it summarizes the typical steps involved in merger transactions including planning, obtaining resolutions, and implementation.
The document discusses various types of mergers and acquisitions including horizontal, vertical, conglomerate mergers as well as acquisitions. It also discusses leveraged buyouts and different types of corporate restructuring activities such as divestitures, spin-offs, and split-ups. The key reasons for mergers and acquisitions include increasing market share, achieving economies of scale, and expanding into new markets or products. Mergers and acquisitions can fail due to cultural differences, lack of integration planning, and poor management of stakeholders.
Introduction to principles of Mergers & AcquisitionsNitant Trilokekar
This document discusses the corporatization of non-corporate entities and the conversion of proprietorships and partnerships into companies through corporate restructuring. It outlines the key benefits of converting to a company such as limited liability, greater borrowing power, and employee stability. The document then describes the procedure for converting a partnership firm into a company according to Part IX of the Companies Act of 1956. It lists the key conditions and requirements that must be met, including minimum share capital amounts. Finally, it provides steps for incorporating a company under Part IX and discusses types of mergers and acquisitions.
Corporate restructuring refers to changes in a company's ownership, business model, assets, or alliances to improve shareholder value. It can involve reorganizing ownership, business operations, or assets. Common types of restructuring include mergers, acquisitions, divestitures, spin-offs, and joint ventures. Mergers are done horizontally within an industry, vertically with suppliers or customers, concentrically to share expertise, or conglomerately across industries. The goal is often to gain competitive advantages through economies of scale, expanded resources or markets, or reduced costs. Regulatory approval and shareholder approval are typically required for major restructuring transactions.
The document discusses different types of venture capital including early stage financing, expansion financing, and acquisition/buyout financing. It also describes the key features and advantages/disadvantages of venture capital. Venture capital is a type of private equity typically provided for early-stage, high-potential, and growth companies. It comes from institutional investors and high-net-worth individuals and is pooled by dedicated investment firms.
- Share repurchases, also known as buybacks, refer to a company purchasing its own shares from shareholders. This provides an exit option for shareholders and can maximize shareholder wealth.
- Companies may engage in buybacks to correct over-capitalization, shore up management stakes, or provide an exit mechanism for shareholders. Regulations in India govern buybacks by listed and unlisted companies, requiring compliance with pricing guidelines, timelines, and other procedures.
Corporate restructuring refers to changes in ownership, business mix, assets, and alliances to enhance shareholder value. It involves ownership restructuring, business restructuring, and asset restructuring through mergers, acquisitions, divestitures, and other methods. Mergers can be horizontal, vertical, or conglomerate. Motives for restructuring include limiting competition, utilizing underused resources, achieving economies of scale, and gaining access to new markets. Legal procedures and valuation methods are required for mergers and acquisitions.
Role of mib in mergers and acquisitinsKavita Patil
The document discusses the role of merchant bankers in mergers and acquisitions. It begins by defining mergers and acquisitions, describing different types of each. It then discusses the statutory framework governing M&As in India and the tax implications. The role of merchant bankers includes conducting due diligence, arriving at valuations, advising on transaction structures, and facilitating the process. Key activities involve negotiations, board approvals, drafting schemes of arrangement, and regulatory filings. Valuation methods include DCF analysis, comparable companies, and sum-of-parts. Debt financing is also considered through leveraged buyout analysis.
This document provides an overview of mergers and acquisitions. It discusses various forms of restructuring like expansions, sell-offs, and changes in ownership structure. It also describes different types of mergers like horizontal, vertical, and conglomerate mergers. The document outlines reasons for merger movements in the late 19th century, 1920s, 1940s-1950s, and 1960s-1970s, often linked to economic and technological changes. It discusses the impacts of M&A activity on industry concentration. Finally, it briefly touches on risk arbitrage related to M&A deals.
This document provides an overview of mergers and acquisitions. It discusses various forms of restructuring like expansions, sell-offs, and changes in ownership structure. It also describes different types of mergers like horizontal, vertical, and conglomerate mergers. The document outlines reasons for merger movements in the late 19th century, 1920s, 1940s-1950s, and 1960s-1970s, often linked to economic and technological changes. It discusses the impacts of M&A activity on industry concentration. Finally, it briefly touches on risk arbitrage related to M&A deals.
The document discusses corporate restructuring, which involves modifying a company's capital structure or operations when experiencing significant problems or financial jeopardy. It defines corporate restructuring and introduces the topic. It then discusses types of restructuring like financial and organizational restructuring. It outlines reasons for restructuring like change in strategy, lack of profits, or reverse synergy. It also covers characteristics, aspects to consider, and types of restructuring transactions like mergers, divestments, takeovers and more. Finally it discusses benefits of restructuring like increased market share, reduced competition, economies of scale and tax benefits.
Top mergers acquisitions in telecom industryAnit Vattoly
The document discusses mergers and acquisitions in the telecom industry. It provides details about the merger between Vodafone India and Idea, two major telecom companies in India. Vodafone is a large multinational telecom company headquartered in London, with mobile operations in 26 countries. Idea is the third largest wireless operator in India, headquartered in Mumbai. The document then discusses some of the top mergers and acquisitions that have occurred in the telecom industry.
This document discusses various types of corporate restructuring methods including mergers, acquisitions, strategic alliances, joint ventures, demergers, divestitures, leveraged buyouts, employee stock option plans, sell-offs, equity carve-outs, and spin-offs. It provides details on each type such as definitions, examples, and reasons for using certain methods. Key points include that mergers combine two companies, acquisitions involve purchasing another company, and strategic alliances and joint ventures allow companies to partner together without fully merging.
Corporate restructuring involves changes to a company's ownership, structure, or operations. There are several forms of restructuring, including expansion, diversification, collaboration, spinning off business units, and mergers, amalgamations, and acquisitions. Mergers involve one company acquiring another, while amalgamations combine two companies into a new entity. Acquisitions occur when one company gains control of another. Determining the appropriate exchange ratio of shares is a key part of mergers and amalgamations. The process also requires approval from boards of directors, shareholders, creditors, and sometimes courts or regulatory bodies. Diversification grows a company through new products or services, while disinvestment sells non-profitable business units to focus resources.
This document discusses mergers and acquisitions. It defines mergers as a combination of two or more companies into one surviving company, while acquisitions involve purchasing a controlling interest in another company. The document outlines different types of mergers like horizontal, vertical, and conglomerate mergers. It also discusses leveraged buyouts, hostile takeovers, and bailout takeovers. Some benefits of mergers and acquisitions mentioned include gaining cost efficiency, entering new markets, and improving competitiveness. Potential causes of failures include cultural differences between companies and defensive or ego-driven motivations. Several major mergers and acquisitions involving Indian companies are also briefly outlined.
This content is designed to develop understanding of different types of mergers and acquisitions and the process involved in executing their deals and also develop an ability to understand factors influencing the valuation of a business and different methods used in Business Valuation.
Corporate restructuring is the process of redesigning aspects of a company, such as its capital structure, asset mix, or organization, in order to increase competitiveness or survive adverse economic conditions. Reasons for restructuring include positioning the business strategically, responding to the economy, growth, technology changes, or government policy. Restructuring can involve mergers, acquisitions, divestitures, joint ventures, leveraged buyouts, or management buyouts. Limitations to successful restructuring include lack of management commitment, resistance to change, poor communication, and insufficient resources.
The document discusses the integration of a merger for shareholders. It defines a merger as the combination of two or more companies where one survives and the other is dissolved. Mergers allow for synergy that can increase shareholder value through operating efficiencies and economies of scale. The document outlines the merger process and provides examples of mergers in different industries. It discusses the strategic and business reasons for mergers, including positioning for future opportunities, filling strategic gaps, bargaining purchases, and diversification.
A merger occurs when one company is absorbed by another, while an acquisition takes place when a larger company takes over the shares and assets of a smaller company. Mergers and acquisitions allow companies to achieve economies of scale, gain market share, and increase competitiveness. However, they can also lead to integration difficulties and excessive debt if not managed properly. Some major mergers and acquisitions in India include the Reliance-BP deal, Essar exiting Vodafone, and Vedanta acquiring Cairn India. Reverse mergers allow private companies to go public by acquiring shell public companies.
This document discusses various retrenchment strategies that a company can adopt when it aims to reduce business operations and expenses to reach a more stable financial position. It describes turnaround, dis-investment, and liquidation strategies. Turnaround strategy aims to convert a loss-making unit into a profitable one by cutting expenses and unproductive activities. Dis-investment strategy involves selling off business units that are underperforming. Liquidation strategy is the extreme case where a company decides to sell its entire business operations. The document provides reasons for and processes of implementing each retrenchment strategy through case studies.
This document discusses mergers and acquisitions. It defines mergers and acquisitions, provides examples of each, and discusses the different types including horizontal, vertical, conglomerate, and cross-border mergers and acquisitions. It also outlines the main methods of payment in mergers and acquisitions including cash, security, and leveraged buyouts. Finally, it summarizes the typical steps involved in merger transactions including planning, obtaining resolutions, and implementation.
The document discusses various types of mergers and acquisitions including horizontal, vertical, conglomerate mergers as well as acquisitions. It also discusses leveraged buyouts and different types of corporate restructuring activities such as divestitures, spin-offs, and split-ups. The key reasons for mergers and acquisitions include increasing market share, achieving economies of scale, and expanding into new markets or products. Mergers and acquisitions can fail due to cultural differences, lack of integration planning, and poor management of stakeholders.
Introduction to principles of Mergers & AcquisitionsNitant Trilokekar
This document discusses the corporatization of non-corporate entities and the conversion of proprietorships and partnerships into companies through corporate restructuring. It outlines the key benefits of converting to a company such as limited liability, greater borrowing power, and employee stability. The document then describes the procedure for converting a partnership firm into a company according to Part IX of the Companies Act of 1956. It lists the key conditions and requirements that must be met, including minimum share capital amounts. Finally, it provides steps for incorporating a company under Part IX and discusses types of mergers and acquisitions.
Corporate restructuring refers to changes in a company's ownership, business model, assets, or alliances to improve shareholder value. It can involve reorganizing ownership, business operations, or assets. Common types of restructuring include mergers, acquisitions, divestitures, spin-offs, and joint ventures. Mergers are done horizontally within an industry, vertically with suppliers or customers, concentrically to share expertise, or conglomerately across industries. The goal is often to gain competitive advantages through economies of scale, expanded resources or markets, or reduced costs. Regulatory approval and shareholder approval are typically required for major restructuring transactions.
Efficient market Hypothesis that explains the Capital asset pricing modelDr Yogita Wagh
The efficient market hypothesis (EMH) states that stock prices already reflect all known information and that it is impossible for investors to outperform the market over time. There are three forms of the EMH - weak, semi-strong, and strong - with each incorporating more types of information. Most evidence supports the weak and semi-strong forms, indicating that technical and fundamental analysis do not reliably beat the market. If markets are efficient, the optimal investment strategy is a passive, diversified approach rather than trying to pick individual stocks.
The document describes the key components of a financial system including suppliers and demanders of funds, methods of transferring capital through direct or indirect means using financial intermediaries or markets, and the major institutions and instruments that make up India's formal financial system such as banks, markets, and services like funds intermediation and risk management. A well-functioning financial system is characterized by elements such as a strong legal framework, stable currency, and sound banking and securities markets.
capital budgeting introduction,types of techniques and capital rationingDr Yogita Wagh
Capital budgeting is the process that companies use to evaluate potential long-term investments and major capital expenditures. There are four main questions addressed in capital budgeting: 1) How do firms decide whether to invest in long-lived assets? 2) How are choices made between mutually exclusive investments? 3) How are different capital budgeting techniques related? 4) Which techniques do firms actually use? Common capital budgeting techniques include net present value (NPV), internal rate of return (IRR), payback period, average rate of return, and profitability index. These techniques are used to evaluate projects, make acceptance/rejection decisions between mutually exclusive projects, and determine project selection under capital rationing constraints.
The document discusses financial services regulation in the UK. It provides information on the purpose of regulation, how regulation has developed over time, and the key regulatory bodies in the UK - the Prudential Regulation Authority (PRA), Financial Policy Committee (FPC), and Financial Conduct Authority (FCA). The FCA is responsible for regulating conduct in the financial markets and oversees firms to ensure they are authorized and individuals working in controlled functions are approved persons. The FCA also promotes the Treating Customers Fairly (TCF) initiative to protect consumers.
Corporate restructuring is the process of reorganizing aspects of a company, such as its capital structure, operations, or ownership. It can occur for reasons like making a company more competitive, surviving adverse economic conditions, or pursuing new strategic directions. Common forms of corporate restructuring include mergers, acquisitions, divestitures, spin-offs, and other transactions that change a company's scope outside of ordinary business operations. Restructuring aims to provide benefits like sales enhancement, cost reductions, operating efficiencies, management improvements, and addressing underperforming parts of the business.
1) Hire purchase allows a customer to receive goods immediately but pay for them through installments, with ownership transferring once all installments are paid.
2) The legal framework for hire purchase transactions is regulated by the Hire Purchase Act of 1972, which defines key aspects of the agreement such as installment payments and transferring ownership.
3) When evaluating hire purchase financially, the desirability is determined by comparing the present value of the net cash outflow under hire purchase to leasing, considering interest, tax implications, depreciation and salvage value.
The document discusses equipment leasing, including:
1) Equipment leasing provides companies use of fixed assets through contractual rental payments that are tax deductible. The lessee uses the asset while the lessor owns it.
2) When evaluating a lease, companies compare the cost of leasing an asset to the cost of financing its purchase. If leasing costs less, the asset is leased; if financing costs less, the asset is purchased.
3) Lease accounting records leasing transactions on companies' financial statements according to whether the company is lessor or lessee. This provides transparency into leasing's impact on company value and finances.
This document provides an overview of financial policy and strategic planning. It discusses strategic planning processes, objectives and goals. It also covers corporate planning, financial planning, and financial models. Specifically, it defines strategic planning and discusses the strategic planning process. It outlines objectives of strategic planning including financial, internal, customer, and learning/growth objectives. It also defines corporate planning and financial planning, outlining types of financial plans. The document then discusses financial models, their uses, limitations, development process, and types including three statement, LBO, consolidation, IPO, budget, and forecast models. It concludes by covering applications of financial modeling in fields like investment banking, project finance, and corporate finance.
This document provides an overview of the Indian financial system, including its key constituents and components. It discusses the importance of financial regulation in maintaining stability and integrity. The main objectives of financial regulatory bodies in India are financial stability, consumer protection, maintaining market confidence, and reducing financial crime. The financial system consists of financial markets, intermediation, and instruments. Major components include money markets, capital markets, foreign exchange markets, and credit markets. Common financial instruments include treasury bills, certificates of deposit, commercial papers, and various equity and debt instruments.
The document discusses financial services regulation in the UK. It provides information on the purpose of regulation, how regulation has developed over time, and the key regulatory bodies in the UK - the Prudential Regulation Authority (PRA), Financial Policy Committee (FPC), and Financial Conduct Authority (FCA). The FCA is responsible for regulating conduct in the financial services industry and aims to achieve its objective of protecting consumers through its "Treating Customers Fairly" (TCF) approach.
Ratio analysis involves computing relationships between financial statement items to interpret a firm's strengths, weaknesses, historical performance, and current condition. Ratios are classified into liquidity, capital structure, profitability, and activity ratios. Liquidity ratios measure short-term solvency, capital structure ratios measure long-term solvency, profitability ratios measure operating efficiency and returns, and activity ratios measure resource utilization. Caution must be exercised when interpreting ratios, which are best analyzed over time, against industry benchmarks, or through inter-firm comparison.
Ratio analysis involves computing relationships between financial statement items to interpret a firm's strengths, weaknesses, historical performance, and current condition. Ratios are classified into liquidity, capital structure, profitability, and activity ratios. Liquidity ratios measure short-term solvency and ability to meet current commitments, such as current and quick ratios. Capital structure ratios indicate long-term solvency and ability to repay debt, like debt-equity and proprietary ratios. Ratios are most informative when compared over time, against industry standards, or between firms.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Optimizing Net Interest Margin (NIM) in the Financial Sector (With Examples).pdfshruti1menon2
NIM is calculated as the difference between interest income earned and interest expenses paid, divided by interest-earning assets.
Importance: NIM serves as a critical measure of a financial institution's profitability and operational efficiency. It reflects how effectively the institution is utilizing its interest-earning assets to generate income while managing interest costs.
How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
Cryptocurrencies can be used for various purposes, including online purchases, investment opportunities, and as a means of transferring value globally without the need for intermediaries like banks.
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TEST BANK Principles of cost accounting 17th edition edward j vanderbeck maria r mitchell.docx
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Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
The Impact of Generative AI and 4th Industrial RevolutionPaolo Maresca
This infographic explores the transformative power of Generative AI, a key driver of the 4th Industrial Revolution. Discover how Generative AI is revolutionizing industries, accelerating innovation, and shaping the future of work.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
2. What is Corporate Restructuring?
• Corporate Restructuring is the process of redesigning one or more
aspects of a company.
• The process of reorganizing a company may be implemented due to a
number of different factors, such as positioning the company to be
more competitive, surviving a currently adverse economic climate, or
acting on the self confidence of the corporation to move in an entirely
new direction.
3. What is Corporate
Restructuring?
Any change in a company’s:
1. Capital structure,
2. Operations, or
3. Ownership
that is outside its ordinary course of
business.
So where is the value coming
from (why restructure)?
4. Why Engage in
Corporate Restructuring?
•
•
•
•
•
•
Sales enhancement and operating economies*
Improved management
Wealth transfers
Tax reasons
Leverage gains
Management’s personal agenda
* Will be discussed in more detail in the following two slides.
5. Why Engage in
Corporate Restructuring?
• Growth
• •Diversification
• •Optimum utilization of capacities
• •Improved competencies
• •Cost reduction
• •Financial restructuring / support
• •Revival of weak or sick company
• •Widen market presence
• •Advantages of brand equity / goodwill / IP
6. Sales Enhancement
and Operating Economies
• Sales enhancement can occur because of market
share gain, technological advancements to the
product table, and filling a gap in the product line.
Operating economies can be achieved because of the
elimination of duplicate facilities or operations and
personnel.
Synergy -- Economies realized in a merger where the
performance of the combined firm exceeds that of its
previously separate parts.
•
•
7. Sales Enhancement
and Operating Economies
•
•
•
•
Horizontal merger: best chance for economies
Vertical merger: may lead to economies
Conglomerate merger: few operating economies
Divestiture: reverse synergy may occur
Economies of Scale -- The benefits of size in
which the average unit cost falls as volume
increases.
8. GOVERNING PROVISION
SECTION 391-394 of Companies Act, 1956
Most liberal sections in the entire
Companies Act, 1956.
By way of SCHEME you can
propose & achieve whatever you want
10. Expansion
• Expansion is a form of restructuring, which results in an increase in
the size of the firm. It can take place in the form of a merger,
acquisition, tender offer, asset acquisition or a joint venture.
11. Mergers
• Merger is defined as a combination of two or more companies into a single
company
• Amalgamation is the type of merger that involves fusion of
two or more companies. After the amalgamation, the two
companies loose their individual identity and a new
company comes into existence. This form is generally
applied to combinations of firms of equal size.
A B AB
Brooke Bond
India Ltd
Lipton
India Ltd
Brooke Bond Lipton
India Ltd
12. Acquisition
• A corporate action where an acquiring company makes a bid for an
acquiree. If the target company is publicly traded, the acquiring
company will make an offer for the outstanding shares
• Absorption is a type of merger that involves fusion of a small company with a
large company. After the merger the smaller company ceases to exist.
A B A
Oriental Bank Of
Commerce
Global Trust
Bank
Oriental Bank Of
Commerce
13. Joint Venture
• Cooperation between two or more companies in which the
purpose is to achieve jointly a specified business goal.
• Upon the attainment of the goal, the joint venture is
terminated.
• A joint venture, which is typically limited to one project,
differs from a partnership that can work jointly on many
projects.
A B AB
Hero Motor
Corp
Honda Hero Honda
14. Tender Offer
• Tender offer is a corporate finance term denoting a type of
takeover bid.
• The tender offer is a public, open offer or invitation (usually
announced in a newspaper advertisement) by a prospective
acquirer to all stockholders of a publicly traded corporation (the
target corporation) to tender their stock for sale at a specified
price during a specified time, subject to the tendering of a
minimum and To induce the shareholders of the target company to
sell, the acquirer's offer price usually includes a premium over the
current market price of the target company's shares.
A
F
E
D
B C
G
K
J
I
H
Public Offer
15. Example ---- Tender Offer
➢Flextronics International giving an open market offer at
Rs. 548 for 20% of paid up capital in Hughes Software
Systems.
➢AstraZenca Pharmaceuticals AB, a Swedish firm,
announced an open offer to acquire 8.4% stake in
AstraZenca Pharma India at a floor price of Rs. 825 per
share.
16. Asset Acquisition
□A buyout strategy in which key assets of the target company are
purchased, rather than its shares.
□These assets may be tangible assets like a manufacturing unit or
intangible assets like brands.
□ This is particularly popular in the case of bankrupt companies, who
might otherwise have valuable assets which could be of use to other
companies, but whose financing situation makes the company un-
attractive for buyers
A A
B
17. Examples ---- Asset Acquistion
➢The acquisition of the cement division of Tata Steel by Laffarge of
France. Laffarge acquired only the 1.7 million tonne cement plant
and its related assets from Tata Steel.
➢The asset being purchased may also be intangible in nature. For
example, Coca-Cola paid Rs.170 crore to Parle to acquire its soft
drinks brands like Thums Up, Limca, Gold Spot etc.
➢Google acquired the Motorola for its new open source operating
system “Android” for the need of Motorola’s 17000 patents out
of which Google needs around 6000 patents.
➢M3M India acquired DLF 28- Acre Plot in Gurgaon as non core
assets for Rs 440 Cr.
19. Contraction
• Contraction is a form of restructuring, which results in a reduction in the size
of the firm. It can take place in the form of a
• Spin-off,
• Split off,
• Divestiture
• Equity carve-out.
20. Spin-off
• A Company distributes all the shares it owns in a subsidiary to its own
shareholders implying creation of two separate public companies with same
proportional equity ownership. Sometimes, a division is set up as a separate
company. Hence, the stockholders proportional ownership of shares is the same
in the new legal subsidiary as well as the parent firm. The new entity has its own
management and is run independently from the parent company. A spin-off
does not result in an infusion of cash to parent company.
Shareholders of
Company A
A
B
Subsidiary
Company
of A
B
Shareholders of
Company A also has
shares of Company B
A B
21. Examples ----- Spin-off
• Air-India has formed a separate company named Air-India
Engineering Services Ltd., by spinning-off its engineering division.
• Guidant was spun out of Eli Lilly and Company in 1994, formed
from Lilly's Medical Devices and Diagnostics Division.
• Agilent Technologies spun out of Hewlett-Packard in 1999,
formed from HP's former test-and-measurement equipment
division.
• Cenovus Energy was spun out of Encana Corporation in 2009
• Shugart Associates was a spin-out of IBM.
22. Split- off
• In a split off, a new company is created to takeover the operations of an existing
division or unit. A portion of existing shareholders receives stock in a subsidiary
(new company) in exchange for parent company stock Hence the shareholding
of the new entity does not reflect the shareholding of the parent firm. A split-off
does not result in any cash inflow to the parent company
Shareholders of
Company A
A
C D E F
Operations of Company
D
Shareholders of
Company A
Shareholders
of Company B
Shareholders
of Company A
A
F
E
C
B
D
New Company
23. Split-UP
• In a split-up the entire firm is broken up in series of spin-offs, so that the parent
company no longer exists and only the new off springs survive. A split-up
involves the creation of a new class of stock for each of the parent’s operating
subsidiaries, paying current shareholders a dividend of each new class of stock,
and then dissolving the parent company.
Shareholders of
Company A
A
E
B C D
Subsidiary Companies
A
Shareholders of
Company A will get
shares of
B C D E
24. Examples ------ Split-UP
•The Andhra Pradesh State Electricity Board (APSEB)
was split-up in 1999 as part of the Power Sector
reforms.
•The power generation business and the
transmission and distribution business has
transferred to two separate companies called
APGENCO and APTRANSCO respectively. APSEB
ceased to exist as a result of split-up.
25. Divestitures
• A divestiture is a sale of a portion of the firm to an outside party, generally
resulting in an infusion of cash to the parent.
• A firm may choose to sell an undervalued operation that it determines to be
non-strategic or unrelated to the core business and to use the proceeds of the
sale to fund investments in potentially higher return opportunities.
Ope
rati
ons
A
Some Operations of
A
Cash
B
Op
era
tion
s of
A
26. Equity Carve Out
• A parent has substantial holding in a subsidiary. It sells part of that holding to
the public. "Public" does not necessarily mean a shareholder of the parent
company. Thus the asset item "Subsidiary Investment" in the balance-sheet of
the parent company is replaced with cash. Parent company keeps control of the
subsidiary but gets cash.
Issues IPO of B 20%
Shares of B
Cash
Investors
20%
Shares of
Company
B
A
B
Subsidiary
Company
of A
28. Corporate Control
• Firms can also restructure without necessarily acquiring new firms or
divesting existing corporations.
• Corporate control involves obtaining control over the management
of the firm.
• Control is the process by which managers influence other members
of an organization to implement the organizational strategies
29. Takeover Defenses
Takeover defenses, both pre-bid and post-bid have been resorted to by the
companies.
Pre Bid: This defense is also called preventive defense it is employed to prevent a
sudden, unexpected hostile bid from gaining control of the company.
Post Bid: When preventive takeover defenses are not successful in fending off an
unwanted bid, the target implements post-bid or active defenses
These takeover defenses intend to change the corporate control position of
the promoters.
30.
31. Reliance Industries Limited
- A Unique Scheme of Arrangement-
FACTS
PRE –ARRANGEMENT
SCENARIO
Reliance Industries Limited was
engaged in various businesses:
(i) Coal based power business;
(ii) Gas based power business;
(iii) Financial services business;
(iv) Tele-Communication business
32. The family arrangement aims at
✓Segregation between the two Ambani Brothers
✓Provision for Specified Investors was made:
▪ Holdings of RIL and other companies in the control
of Mr. Mukesh Ambani were transferred to a
wholly owned subsidiary, Reliance Industrial
Investments and Holdings Limited (RIIHL) along
with a Private Trust (Petroleum Trust).
▪ RIIHL and Petroleum Trust were described as
“Specified Investors” which renounced their rights
in the scheme itself.
RIL… demerger
33. ✓As a result of demerger the shareholders of Reliance
Industries Ltd. other than “Specified Investors” got one
share each in the following four resulting companies
for each share held in RIL as on the record date:
▪ Reliance Energy Venture Ltd. (REVL)
▪ Reliance Communication Venture Ltd. (RCOVL)
▪ Reliance Capital Venture Ltd. (RCVL)
▪ Reliance Natural Resources Limited (RNRL)
✓The shares of all these resulting companies got listed
on the stock exchanges under the provisions of Cl
8.5.3.1 of the SEBI (DIP) Guidelines.
RIL… demerger
34. Benefits achieved……..
Particulars Amount
(Rs.)
24th March 2006
Amount
(Rs.)
20th December,
2007
Value of the shares held
by a shareholder as on
record date (25th
Jan,2006) (A)
Shares in RIL 100 (@708) 70800
Shares in REL 100 (@38) 3800
Shares in RCOL 100 (@290) 29000
Shares in RCL 100 (@24) 2400
Shares in RNRL 100 (@23) 2300
100 shares @928
92800
(@2700) 270000
(@1900) 90000
(@706) 70600
(@2376) 237600
(@163) 16300
Total 108300 684500
Net benefit 15500 576200