In today’s scenario, we come across great mergers and acquisitions of various companies generally to enhance their financial synergies for lower cost of capital, to improve the company’s performance, and for diversification for higher growth products or markets. In general terms mergers and acquisitions, we mean the consolidations of two or more companies to form one. Although M&A are used interchangeably, they come with different legal meanings, as in mergers, two companies of similar size or so combine to form a new single entity. On the other hand, an acquisition is when a larger company acquires a smaller company, thereby absorbing the business of the smaller company. Moreover, mergers and acquisitions transactions can be differentiated as a horizontal, vertical, conglomerate, etc, or determined in form as a statutory, subsidiary, or consolidations. Valuation being a significant part of M&A is a major point of discussion between the acquirer and the target company.

1. Mergers and acquisitions
-Scope importance and motive

2. Introduction
In today’s scenario, we come across great mergers and acquisitions of various companies
generally to enhance their financial synergies for lower cost of capital, to improve the
company’s performance, and for diversification for higher growth products or markets. In
general terms mergers and acquisitions, we mean the consolidations of two or more
companies to form one. Although M&A are used interchangeably, they come with different
legal meanings, as in mergers, two companies of similar size or so combine to form a new
single entity. On the other hand, an acquisition is when a larger company acquires a smaller
company, thereby absorbing the business of the smaller company. Moreover, mergers and
acquisitions transactions can be differentiated as a horizontal, vertical, conglomerate, etc, or
determined in form as a statutory, subsidiary, or consolidations. Valuation being a significant
part of M&A is a major point of discussion between the acquirer and the target company.

4. History
Most histories of M&A begin in the late 19th century United States. However, mergers coincide historically with
the existence of companies. In 1708, for example, the East India Company merged with an erstwhile competitor
to restore its monopoly over the Indian trade. In 1784, the Italian Monte dei Paschi and Monte Pio banks were
united as the Monti Reunite. In 1821, the Hudson's Bay Company merged with the rival North West Company.
The Great Merger Movement: 1895–1905
The Great Merger Movement was a predominantly U.S. business phenomenon that happened from 1895 to
1905. During this time, small firms with little market share consolidated with similar firms to form large,
powerful institutions that dominated their markets, such as the Standard Oil Company, which at its height
controlled nearly 90% of the global oil refinery industry. It is estimated that more than 1,800 of these firms
disappeared into consolidations, many of which acquired substantial shares of the markets in which they
operated. The vehicle used were so-called trusts. In 1900 the value of firms acquired in mergers was 20%
of GDP. In 1990 the value was only 3% and from 1998 to 2000 it was around 10–11% of GDP. Companies such
as DuPont, U.S. Steel, and General Electric that merged during the Great Merger Movement were able to keep
their dominance in their respective sectors through 1929, and in some cases today, due to growing
technological advances of their products, patents, and brand recognition by their customers. There were also
other companies that held the greatest market share in 1905 but at the same time did not have the
competitive advantages of the companies like DuPont and General Electric.

5. Scope
Mergers & Acquisition have gained popularity throughout the world in recent times. They
have become popular due to globalization, liberalization, technological developments &
intensely competitive business environment. Mergers and acquisitions are a big part of the
corporate finance world. This process is extensively used for restructuring the business
organization. In India, the concept of mergers and acquisitions was initiated by government
bodies. The Indian economic reform since 1991 has opened up a whole lot of challenges
both in the domestic and international spheres. The increased competition in the global
market has prompted the Indian companies to go for Mergers and Acquisitions as an
important strategic choice. The trends of mergers and acquisitions in India have changed
over the years. The immediate effects of the mergers and acquisitions have also been
diverse across the various sectors of the Indian economy. Mergers and Acquisitions (M&A)
have been around for a long time and have experienced waves of popularity during these
times and they are very much an important part of today's business world. They have also
become increasingly international which can be due to the rising global competition.

6. Motive
Reasons for Mergers and Acquisitions:
• Financial synergy for lower cost of capital
• Improving the company’s performance and accelerating growth
• Economies of scale
• Diversification for higher growth products or markets
• To increase market share and positioning by giving broader market access
• Strategic realignment and technological change
• Tax considerations
• Under-valued target
• Diversification of risk

7. Importance in India
The importance of mergers and acquisition in India can be understood in terms
of their benefits such as-
1. Eliminating staffing redundancies can help reduce costs.
2. It increases the market share and positioning giving broader market access.
3. Improves a company’s performance and accelerates the growth of the company.
4. Economies of scale: It enables the company to purchase raw materials in greater
quantities, which results in reduced cost.
5. Technological changes are followed.
6. Tax benefits
7. Diversification for higher growth products or markets
8. Undervalued target
9. Diversification of risk can be achieved

8. Conclusion
Mergers and Acquisitions form a major part of the corporate sector. Every company
in the market tries to establish itself over the others to gain maximum profits and
brand value. Due to the high level of competition in the market, many companies opt
for mergers or acquisitions. A merger takes place when two companies come
together and form a new company. When one company takes over another company
and announces itself as the new owner, it is known as an acquisition. It is not possible
for every company to have all the resources and technology required for successful
growth. A company agrees to a merger & acquisition, then the main motive is to
acquire unique capabilities and resources that best suit its shares in the market.