This document discusses mergers and acquisitions from several perspectives. It defines mergers and acquisitions, describes the different types of mergers including horizontal, vertical, conglomerate and concentric mergers. It provides examples of mergers in different industries. It also discusses the common motives behind mergers and acquisitions such as increasing market power, acquiring new technologies, and improving efficiencies. Finally, it outlines some of the benefits that can result from mergers and acquisitions like faster growth, new markets, cost reductions and improved profitability.

2.  Strategy management
 Level of strategy in an organization
 Why do firms merge or acquire other firms?
 Basic Definition
 Type of Merger
 Motive behind merger and Acquisition
 Benefit of Merger & Acquisition
 Some example

3.  A company’s strategy consists of the combination
of competitive moves and business approaches
that managers employ to please customers,
compete successfully, and achieve organizational
objectives.
 Strategic management is a continuous process.

5.  Strategy for change
 Strategy for stability
 Strategy for expansion
Merger &Acquisition is the part of strategy
for expansion

6.  Why do firms merge or acquire other firms?
Several possibilities.
› Increase market power
› Acquire financial strength,
› Tax loss carry forwards
› Acquire specific product lines
› Achieve synergies
› Gain economies of scale
 Strategies subject to debate: Prevalent belief is that
M&A result in increased profits, competitiveness, &
increased stockholder wealth.

7. A. Merger; combination of two firms into one.
B. Acquisition; one business buys another.
1. Cash.
2. Securities.
3. Combination of cash and securities.

8.  Horizontal Mergers
 Vertical Mergers
 Conglomerate Mergers
 Concentric Mergers

9.  Horizontal –Combination of two or more firm
operating in same stage of production.
 Ex: Merger of Tata Industrial finance Ltd with
Tata Finance Ltd
 Vertical-When two or more firm operating in
the different stage of production.
 Ex: Merger of Reliance Petro Chemicals Ltd
with Reliance Industries Ltd is a Back ward
Integration

10.  Conglomerate- These mergers involve firms
engaged in unrelated type of business
activities i.e. the business of two companies
are not related to each other horizontally ( in
the sense of producing the same or competing
products),nor vertically
 Example: General Electric buying NBC
television

11.  Concentric Mergers- Merger of two firms
that are so related that there is a carry over
of specific management functions
(research, manufacturing, finance,
marketing, etc.)
 Example: Citigroup (principally of a
bank)buying Salomon Smith Barney (an
investment banker/stock brokerage
operation)

12.  An acquisition, also known as a, takeover or a
buyout, is the buying of one company by another.
 An acquisition may be friendly or hostile.
 In the former case, the companies cooperate in
negotiations; in the latter case, the target is unwilling
to be bought or the target's board has
no prior knowledge of the offer.
 Acquisition usually knowledge of the offer.
Acquisition usually refers to a purchase of a smaller
firm by a larger one.

13.  Quicker way to growth.
 Accessing new markets.
 Taking on the global competition.
 Improving operating margins and efficiencies
 Acquiring visibility and international brands .
 Buying cutting-edge technology rather than
importing it.
 Developing new product mixes

14.  Limited Competition
 Gaining Market power
 Diversification
 Improving profitability
 Cost reduction
 Faster growth

15.  Tata steel buys Corus Plc : 12.1$ billion
 Hindalco acquired novelis: 6$ billion
 Tata buy jaguar and land rover : 2.3$ billion
 Essar steel buys Algoma Steel: 1.58$ billion
 Vodafone buys hutch : 11$ billion
 POSCO to invest in building steel manufacturing plants and
facilities in India by 2016
 Goldman Sachs Plans investment in private equity, real estate, and
private wealth management