SlideShare a Scribd company logo
Scope of Presentation:
• Key Terms
• Merger v/s Acquisition
• Reasons for M & A
• Types of Acquisition
• Problems in achieving success
MERGERS & ACQUISITION
MERGER:
Where Assets and Liabilities of one company
are transferred to another and the first
company loses its existence.
MERGERS & ACQUISITION
MERGERS & ACQUISITION
MERGERS & ACQUISITION
AMALGAMATION:
Where two or more companies carrying on
similar business go into liquidation and a new
company is formed to take over their business.
MERGERS & ACQUISITION
ACQUISITION:
A corporate action in which a company buys
most, if not all, of the target company's
ownership stakes in order to assume control of
the target firm.
MERGERS & ACQUISITION
How do Mergers and Acquisitions Differ?
• The words are often used interchangeably even
though they mean something very different.
• Merger sounds more amicable, less threatening.
h
MERGERS & ACQUISITION
Mergers Acquisitions
• Two firms are combined on
relatively co-equal basis.
• Parent stocks are usually
retired and new stock issued.
• Name may be one of the
parents’ or a combination.
• One of the parents usually
emerges as the dominant
management.
• One firm buys another firm.
• Can be a controlling share, a
majority, or all of the target
firm’s stock.
• Can be friendly or hostile.
• Usually done through a tender
offer.
Why go for Mergers & Acquisitions
1)Increased market power:
Exists when a firm is able to sell its goods or services above competitive
levels or when the costs of its primary or support activities are lower than
those of its competitors
• Sources of market power include
 Size of the firm
 Resources and capabilities to compete in the market
 Share of the market
• Entails buying a competitor, a supplier, a distributor, or a business in a
highly related industry
MERGERS & ACQUISITION
MERGERS & ACQUISITION
Contd......
2)To increase market power, firms use:
• Horizontal Acquisitions
Acquirer and acquired companies compete in the same industry
• Vertical Acquisitions
Firm acquires a supplier or distributor of one or more of its
goods or services; leads to additional controls over parts of
the value chain
• Related Acquisitions
Firm acquires another company in a highly related industry
3)Overcoming entry barriers into:
• New product markets – product diversification
• New international markets – geographic
diversification
Cross-border acquisitions – those made between companies
with headquarters in different country
MERGERS & ACQUISITION
4)Cost of new product development and increased speed
to market:
• Can be used to gain access to new products and to current
products that are new to the firm
• Quick approach for entering markets (product and
geographic)
MERGERS & ACQUISITION
5)Lower risk compared to developing new products:
• Easier to estimate acquisition outcomes versus internal
development
• Internal development has a very high failure rate
6)Increased diversification:
• Most common mode of diversification when entering new
markets with new products
• Hard to internally develop products that differ from current lines
for markets in which a firm lacks experience
• The more related the acquisition the higher the chances for
success
MERGERS & ACQUISITION
7)Reshaping firm’s competitive scope:
• Can lessen a firms dependence on one or more products or
markets
8)Learning and developing new capabilities:
• When you acquire a firm you also acquire any skills and
capabilities that it has
• Firms should seek to acquire companies with different but
related and complementary capabilities in order to build
their own knowledge base
MERGERS & ACQUISITION
TYPES OF ACQUISITION
1)Friendly Acquisition
A friendly Acquisition is done with the consent of the
Target Company. Generally there is an agreement
between the acquirer and the target company through
negotiations
2)Hostile Acquisition
Where an acquirer do not offer to Target Company the
proposal to acquire its undertaking but unilaterally pursue
efforts to gain control against the wishes of existing
management
MERGERS & ACQUISITION
Problems in achieving Acquisition Success:
MERGERS & ACQUISITION
1) Integration difficulties:
• Most important determinant of shareholder value creation
• Culture, financial and control systems, working relationships
• Status of newly acquired firm’s executives
2)Inadequate evaluation of target
• Due diligence – process through which a potential acquirer
evaluates a target firm for acquisition
• Can result in paying excessive premium for target company
MERGERS & ACQUISITION
3) Large or extraordinary debt:
High debt can negatively effect the firm
• Increases the likelihood of bankruptcy
• Can lead to a downgrade in a firm’s credit rating
• May preclude needed investment in other activities that
contribute to a firm’s long-term success
– R&D, human resource training, marketing
MERGERS & ACQUISITION
4) Inability to achieve synergy:
Synergy: Value created by units exceeds value of units
working independently
– Achieved when the two firms' assets are complementary in
unique ways
– Generates gains in shareholder wealth that they could not
duplicate or exceed through their own portfolio
diversification decisions
MERGERS & ACQUISITION
Private synergy: Occurs when the combination and
integration of acquiring and acquired firms' assets
yields capabilities and core competencies that could
not be developed by combining and integrating the
assets with any other company
– Very difficult to create private synergy
• Firms tend to underestimate costs and overestimate
synergy
MERGERS & ACQUISITION
5) Too much diversification:
– Firms can become over diversified which can lead to a
decline in performance
– Diversified firms must process more information of greater
diversity
– Scope created by diversification may cause managers to
rely too much on financial rather than strategic controls to
evaluate performance of business units
– Acquisitions may become substitutes for innovation
MERGERS & ACQUISITION
6) Managers overly focused on acquisitions:
– Diverts attention from matters necessary for long-term
competitive success (i.e., identifying other activities,
interacting with important external stakeholders, or fixing
fundamental internal problems)
7) Huge Size of Acquisition:
– Bureaucratic controls: Formalized supervisory and
behavioural rules and policies designed to ensure
consistency of decisions and actions across different units
of a firm – formalized controls decrease flexibility
– Firms may produce less innovation.
MERGERS & ACQUISITION
THANKYOU
MERGERS & ACQUISITION

More Related Content

Similar to MERGERS & ACQUISITION - PPT.ppt PRESENTATION

merger and equisition
merger and equisitionmerger and equisition
merger and equisition
Shafiq Khan
 
Ppt on m&a final ppt
Ppt on m&a final pptPpt on m&a final ppt
Ppt on m&a final ppt
darshanudeshi
 
strategic alliance, merger and acquisition strategy
strategic alliance, merger and acquisition strategy strategic alliance, merger and acquisition strategy
strategic alliance, merger and acquisition strategy
Vishal C
 
merger & aquisitions ppt.
merger & aquisitions ppt.merger & aquisitions ppt.
merger & aquisitions ppt.
Vijaykumar Nishad
 
Corporate finance chapter10
Corporate finance chapter10Corporate finance chapter10
Corporate finance chapter10
Satyam Barsaiyan
 
Acquisition
AcquisitionAcquisition
Acquisition
SabarniChatterjee1
 
Joint venture and mergers and acquition
Joint venture and mergers and acquitionJoint venture and mergers and acquition
Joint venture and mergers and acquition
Dhanush M Holla
 
Corporate level strategy
Corporate level strategyCorporate level strategy
Corporate level strategy
Karen Ler Maramba
 
1LO1Understand when and how diversifying into multipl.docx
1LO1Understand when and how diversifying into multipl.docx1LO1Understand when and how diversifying into multipl.docx
1LO1Understand when and how diversifying into multipl.docx
felicidaddinwoodie
 
Ch08 Discussion Light
Ch08 Discussion LightCh08 Discussion Light
Ch08 Discussion Light
Avinash Kumar
 
Merger and acquisition shareholder value maximization and its legal
Merger and acquisition shareholder value maximization and its legalMerger and acquisition shareholder value maximization and its legal
Merger and acquisition shareholder value maximization and its legal
Arthur Mboue
 
Mergers and Acquisitions and it's detailed information
Mergers and Acquisitions and it's detailed informationMergers and Acquisitions and it's detailed information
Mergers and Acquisitions and it's detailed information
kumarsinghrahul232
 
Mergers and Acquisitions and it's indepth knowledge
Mergers and Acquisitions and it's indepth knowledgeMergers and Acquisitions and it's indepth knowledge
Mergers and Acquisitions and it's indepth knowledge
kumarsinghrahul232
 
Mergers and acquisitions framework | Veristrat Inc.
Mergers and acquisitions framework | Veristrat Inc.Mergers and acquisitions framework | Veristrat Inc.
Mergers and acquisitions framework | Veristrat Inc.
Veristrat Inc
 
internationalization coopertation digitalization
 internationalization coopertation digitalization internationalization coopertation digitalization
internationalization coopertation digitalization
Sohail Mittal
 
Mergers & Acquisitions by Waqas Ali Tunio
Mergers & Acquisitions by Waqas Ali TunioMergers & Acquisitions by Waqas Ali Tunio
Mergers & Acquisitions by Waqas Ali Tunio
Waqas Ali Tunio
 
Acquisition,Merger,Take-over and global strategy by Navid Roy
Acquisition,Merger,Take-over  and global strategy by Navid RoyAcquisition,Merger,Take-over  and global strategy by Navid Roy
Acquisition,Merger,Take-over and global strategy by Navid Roy
Navidroy
 
Expansion through cooperation 2013
Expansion through cooperation 2013Expansion through cooperation 2013
Expansion through cooperation 2013
Shruti Patil
 
Aquisition
AquisitionAquisition
Aquisition
MOHIT PANCHAL
 
STABILITY AND GROWTH OF STRATEGY
STABILITY AND GROWTH OF STRATEGYSTABILITY AND GROWTH OF STRATEGY
STABILITY AND GROWTH OF STRATEGY
Arun Arbind Baxla
 

Similar to MERGERS & ACQUISITION - PPT.ppt PRESENTATION (20)

merger and equisition
merger and equisitionmerger and equisition
merger and equisition
 
Ppt on m&a final ppt
Ppt on m&a final pptPpt on m&a final ppt
Ppt on m&a final ppt
 
strategic alliance, merger and acquisition strategy
strategic alliance, merger and acquisition strategy strategic alliance, merger and acquisition strategy
strategic alliance, merger and acquisition strategy
 
merger & aquisitions ppt.
merger & aquisitions ppt.merger & aquisitions ppt.
merger & aquisitions ppt.
 
Corporate finance chapter10
Corporate finance chapter10Corporate finance chapter10
Corporate finance chapter10
 
Acquisition
AcquisitionAcquisition
Acquisition
 
Joint venture and mergers and acquition
Joint venture and mergers and acquitionJoint venture and mergers and acquition
Joint venture and mergers and acquition
 
Corporate level strategy
Corporate level strategyCorporate level strategy
Corporate level strategy
 
1LO1Understand when and how diversifying into multipl.docx
1LO1Understand when and how diversifying into multipl.docx1LO1Understand when and how diversifying into multipl.docx
1LO1Understand when and how diversifying into multipl.docx
 
Ch08 Discussion Light
Ch08 Discussion LightCh08 Discussion Light
Ch08 Discussion Light
 
Merger and acquisition shareholder value maximization and its legal
Merger and acquisition shareholder value maximization and its legalMerger and acquisition shareholder value maximization and its legal
Merger and acquisition shareholder value maximization and its legal
 
Mergers and Acquisitions and it's detailed information
Mergers and Acquisitions and it's detailed informationMergers and Acquisitions and it's detailed information
Mergers and Acquisitions and it's detailed information
 
Mergers and Acquisitions and it's indepth knowledge
Mergers and Acquisitions and it's indepth knowledgeMergers and Acquisitions and it's indepth knowledge
Mergers and Acquisitions and it's indepth knowledge
 
Mergers and acquisitions framework | Veristrat Inc.
Mergers and acquisitions framework | Veristrat Inc.Mergers and acquisitions framework | Veristrat Inc.
Mergers and acquisitions framework | Veristrat Inc.
 
internationalization coopertation digitalization
 internationalization coopertation digitalization internationalization coopertation digitalization
internationalization coopertation digitalization
 
Mergers & Acquisitions by Waqas Ali Tunio
Mergers & Acquisitions by Waqas Ali TunioMergers & Acquisitions by Waqas Ali Tunio
Mergers & Acquisitions by Waqas Ali Tunio
 
Acquisition,Merger,Take-over and global strategy by Navid Roy
Acquisition,Merger,Take-over  and global strategy by Navid RoyAcquisition,Merger,Take-over  and global strategy by Navid Roy
Acquisition,Merger,Take-over and global strategy by Navid Roy
 
Expansion through cooperation 2013
Expansion through cooperation 2013Expansion through cooperation 2013
Expansion through cooperation 2013
 
Aquisition
AquisitionAquisition
Aquisition
 
STABILITY AND GROWTH OF STRATEGY
STABILITY AND GROWTH OF STRATEGYSTABILITY AND GROWTH OF STRATEGY
STABILITY AND GROWTH OF STRATEGY
 

More from RRR Chambers

TTD - PPT on social stock exchange.pptx Presentation
TTD - PPT on social stock exchange.pptx PresentationTTD - PPT on social stock exchange.pptx Presentation
TTD - PPT on social stock exchange.pptx Presentation
RRR Chambers
 
SETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptx
SETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptxSETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptx
SETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptx
RRR Chambers
 
IA Valuation and Management - PPT 13-01-2024.pptx
IA Valuation and Management  - PPT 13-01-2024.pptxIA Valuation and Management  - PPT 13-01-2024.pptx
IA Valuation and Management - PPT 13-01-2024.pptx
RRR Chambers
 
Valuation of Intangible Assets In Indian Companies In International Financial...
Valuation of Intangible Assets In Indian Companies In International Financial...Valuation of Intangible Assets In Indian Companies In International Financial...
Valuation of Intangible Assets In Indian Companies In International Financial...
RRR Chambers
 
Takeover and its Defense Mechanism - PPT.ppt
Takeover and its Defense Mechanism  - PPT.pptTakeover and its Defense Mechanism  - PPT.ppt
Takeover and its Defense Mechanism - PPT.ppt
RRR Chambers
 
Secretarial Standards - PPT.ppt PRESENTATION
Secretarial Standards - PPT.ppt PRESENTATIONSecretarial Standards - PPT.ppt PRESENTATION
Secretarial Standards - PPT.ppt PRESENTATION
RRR Chambers
 
SEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptx
SEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptxSEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptx
SEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptx
RRR Chambers
 
scrutinizer – Corporate Laws - PPT.pptx
scrutinizer – Corporate Laws -  PPT.pptxscrutinizer – Corporate Laws -  PPT.pptx
scrutinizer – Corporate Laws - PPT.pptx
RRR Chambers
 
Research Progress Report - PPT.ppt PRESENTATION
Research Progress Report - PPT.ppt PRESENTATIONResearch Progress Report - PPT.ppt PRESENTATION
Research Progress Report - PPT.ppt PRESENTATION
RRR Chambers
 
PRESENTATION ON SECRETARIAL STANDARDS - PPT.ppt
PRESENTATION ON SECRETARIAL STANDARDS - PPT.pptPRESENTATION ON SECRETARIAL STANDARDS - PPT.ppt
PRESENTATION ON SECRETARIAL STANDARDS - PPT.ppt
RRR Chambers
 
PERSONALITY DEVLOPMENT - PPT.ppt PRESENTATION
PERSONALITY DEVLOPMENT - PPT.ppt PRESENTATIONPERSONALITY DEVLOPMENT - PPT.ppt PRESENTATION
PERSONALITY DEVLOPMENT - PPT.ppt PRESENTATION
RRR Chambers
 
Key Consideration for Joint Ventures in India 13 July 2013 - PPT.pptx
Key Consideration for Joint Ventures in India 13 July 2013 - PPT.pptxKey Consideration for Joint Ventures in India 13 July 2013 - PPT.pptx
Key Consideration for Joint Ventures in India 13 July 2013 - PPT.pptx
RRR Chambers
 
Interactive meeting on Secretarial Standards 1 &2 - PPT.pptx
Interactive meeting on Secretarial Standards 1 &2  - PPT.pptxInteractive meeting on Secretarial Standards 1 &2  - PPT.pptx
Interactive meeting on Secretarial Standards 1 &2 - PPT.pptx
RRR Chambers
 
Importance of Training for Students - PPT.ppt
Importance of Training for Students - PPT.pptImportance of Training for Students - PPT.ppt
Importance of Training for Students - PPT.ppt
RRR Chambers
 
IMPORTANCE OF TRAINING (signifance of traning) - PPT.ppt
IMPORTANCE OF TRAINING (signifance of traning) - PPT.pptIMPORTANCE OF TRAINING (signifance of traning) - PPT.ppt
IMPORTANCE OF TRAINING (signifance of traning) - PPT.ppt
RRR Chambers
 
CS MANTRA - PPT. pptx (PRESENTATION)
CS MANTRA  -  PPT. pptx   (PRESENTATION)CS MANTRA  -  PPT. pptx   (PRESENTATION)
CS MANTRA - PPT. pptx (PRESENTATION)
RRR Chambers
 
COST AUDITORS - PPT. pptx PRESENTATION
COST AUDITORS  -  PPT. pptx PRESENTATIONCOST AUDITORS  -  PPT. pptx PRESENTATION
COST AUDITORS - PPT. pptx PRESENTATION
RRR Chambers
 
CORPORATE GOVERNANCE (module) - PPT.pptx
CORPORATE GOVERNANCE (module) - PPT.pptxCORPORATE GOVERNANCE (module) - PPT.pptx
CORPORATE GOVERNANCE (module) - PPT.pptx
RRR Chambers
 
Companies Bill 2012,compnies act 1956 - PPT.pptx
Companies Bill 2012,compnies act 1956 - PPT.pptxCompanies Bill 2012,compnies act 1956 - PPT.pptx
Companies Bill 2012,compnies act 1956 - PPT.pptx
RRR Chambers
 
Valuation of INTANGIBLE ASSETS -PPT.pptx
Valuation of INTANGIBLE ASSETS -PPT.pptxValuation of INTANGIBLE ASSETS -PPT.pptx
Valuation of INTANGIBLE ASSETS -PPT.pptx
RRR Chambers
 

More from RRR Chambers (20)

TTD - PPT on social stock exchange.pptx Presentation
TTD - PPT on social stock exchange.pptx PresentationTTD - PPT on social stock exchange.pptx Presentation
TTD - PPT on social stock exchange.pptx Presentation
 
SETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptx
SETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptxSETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptx
SETTING UP OF BUSINESS ENTITIES IN INDIA - PPT - 20.09.2023.pptx
 
IA Valuation and Management - PPT 13-01-2024.pptx
IA Valuation and Management  - PPT 13-01-2024.pptxIA Valuation and Management  - PPT 13-01-2024.pptx
IA Valuation and Management - PPT 13-01-2024.pptx
 
Valuation of Intangible Assets In Indian Companies In International Financial...
Valuation of Intangible Assets In Indian Companies In International Financial...Valuation of Intangible Assets In Indian Companies In International Financial...
Valuation of Intangible Assets In Indian Companies In International Financial...
 
Takeover and its Defense Mechanism - PPT.ppt
Takeover and its Defense Mechanism  - PPT.pptTakeover and its Defense Mechanism  - PPT.ppt
Takeover and its Defense Mechanism - PPT.ppt
 
Secretarial Standards - PPT.ppt PRESENTATION
Secretarial Standards - PPT.ppt PRESENTATIONSecretarial Standards - PPT.ppt PRESENTATION
Secretarial Standards - PPT.ppt PRESENTATION
 
SEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptx
SEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptxSEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptx
SEBI LODR - PEER REVIEW & RECONCILIATION OF SHARE CAPITAL - PPT.pptx
 
scrutinizer – Corporate Laws - PPT.pptx
scrutinizer – Corporate Laws -  PPT.pptxscrutinizer – Corporate Laws -  PPT.pptx
scrutinizer – Corporate Laws - PPT.pptx
 
Research Progress Report - PPT.ppt PRESENTATION
Research Progress Report - PPT.ppt PRESENTATIONResearch Progress Report - PPT.ppt PRESENTATION
Research Progress Report - PPT.ppt PRESENTATION
 
PRESENTATION ON SECRETARIAL STANDARDS - PPT.ppt
PRESENTATION ON SECRETARIAL STANDARDS - PPT.pptPRESENTATION ON SECRETARIAL STANDARDS - PPT.ppt
PRESENTATION ON SECRETARIAL STANDARDS - PPT.ppt
 
PERSONALITY DEVLOPMENT - PPT.ppt PRESENTATION
PERSONALITY DEVLOPMENT - PPT.ppt PRESENTATIONPERSONALITY DEVLOPMENT - PPT.ppt PRESENTATION
PERSONALITY DEVLOPMENT - PPT.ppt PRESENTATION
 
Key Consideration for Joint Ventures in India 13 July 2013 - PPT.pptx
Key Consideration for Joint Ventures in India 13 July 2013 - PPT.pptxKey Consideration for Joint Ventures in India 13 July 2013 - PPT.pptx
Key Consideration for Joint Ventures in India 13 July 2013 - PPT.pptx
 
Interactive meeting on Secretarial Standards 1 &2 - PPT.pptx
Interactive meeting on Secretarial Standards 1 &2  - PPT.pptxInteractive meeting on Secretarial Standards 1 &2  - PPT.pptx
Interactive meeting on Secretarial Standards 1 &2 - PPT.pptx
 
Importance of Training for Students - PPT.ppt
Importance of Training for Students - PPT.pptImportance of Training for Students - PPT.ppt
Importance of Training for Students - PPT.ppt
 
IMPORTANCE OF TRAINING (signifance of traning) - PPT.ppt
IMPORTANCE OF TRAINING (signifance of traning) - PPT.pptIMPORTANCE OF TRAINING (signifance of traning) - PPT.ppt
IMPORTANCE OF TRAINING (signifance of traning) - PPT.ppt
 
CS MANTRA - PPT. pptx (PRESENTATION)
CS MANTRA  -  PPT. pptx   (PRESENTATION)CS MANTRA  -  PPT. pptx   (PRESENTATION)
CS MANTRA - PPT. pptx (PRESENTATION)
 
COST AUDITORS - PPT. pptx PRESENTATION
COST AUDITORS  -  PPT. pptx PRESENTATIONCOST AUDITORS  -  PPT. pptx PRESENTATION
COST AUDITORS - PPT. pptx PRESENTATION
 
CORPORATE GOVERNANCE (module) - PPT.pptx
CORPORATE GOVERNANCE (module) - PPT.pptxCORPORATE GOVERNANCE (module) - PPT.pptx
CORPORATE GOVERNANCE (module) - PPT.pptx
 
Companies Bill 2012,compnies act 1956 - PPT.pptx
Companies Bill 2012,compnies act 1956 - PPT.pptxCompanies Bill 2012,compnies act 1956 - PPT.pptx
Companies Bill 2012,compnies act 1956 - PPT.pptx
 
Valuation of INTANGIBLE ASSETS -PPT.pptx
Valuation of INTANGIBLE ASSETS -PPT.pptxValuation of INTANGIBLE ASSETS -PPT.pptx
Valuation of INTANGIBLE ASSETS -PPT.pptx
 

Recently uploaded

2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
CIkumparan
 
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Syed Muhammad Humza Hussain
 
Bharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptxBharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptx
ShivkumarIyer18
 
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence LawyersDefending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
HarpreetSaini48
 
Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)
Wendy Couture
 
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdfXYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
bhavenpr
 
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee
 
Understanding about ITR-1 and Documentation
Understanding about ITR-1 and DocumentationUnderstanding about ITR-1 and Documentation
Understanding about ITR-1 and Documentation
CAAJAYKUMAR4
 
Lifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point PresentationLifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point Presentation
seri bangash
 
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
SKshi
 
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
9ib5wiwt
 
Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976
PelayoGilbert
 
What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...
lawyersonia
 
Matthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government LiaisonMatthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government Liaison
MattGardner52
 
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
9ib5wiwt
 
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
9ib5wiwt
 
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
osenwakm
 
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Massimo Talia
 
定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样
定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样
定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样
9ib5wiwt
 
Tax Law Notes on taxation law tax law for 10th sem
Tax Law Notes on taxation law tax law for 10th semTax Law Notes on taxation law tax law for 10th sem
Tax Law Notes on taxation law tax law for 10th sem
azizurrahaman17
 

Recently uploaded (20)

2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
2015pmkemenhub163.pdf. 2015pmkemenhub163.pdf
 
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordina...
 
Bharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptxBharatiya Nagarik Suraksha Sanhita power.pptx
Bharatiya Nagarik Suraksha Sanhita power.pptx
 
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence LawyersDefending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence Lawyers
 
Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)Business and Corporate Case Update (2024)
Business and Corporate Case Update (2024)
 
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdfXYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
XYZ-v.-state-of-Maharashtra-Bombay-HC-Writ-Petition-6340-2023.pdf
 
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...
 
Understanding about ITR-1 and Documentation
Understanding about ITR-1 and DocumentationUnderstanding about ITR-1 and Documentation
Understanding about ITR-1 and Documentation
 
Lifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point PresentationLifting the Corporate Veil. Power Point Presentation
Lifting the Corporate Veil. Power Point Presentation
 
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
Presentation (1).pptx Human rights of LGBTQ people in India, constitutional a...
 
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
原版仿制(aut毕业证书)新西兰奥克兰理工大学毕业证文凭毕业证雅思成绩单原版一模一样
 
Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976Ease of Paying Tax Law Republic Act 11976
Ease of Paying Tax Law Republic Act 11976
 
What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...What are the common challenges faced by women lawyers working in the legal pr...
What are the common challenges faced by women lawyers working in the legal pr...
 
Matthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government LiaisonMatthew Professional CV experienced Government Liaison
Matthew Professional CV experienced Government Liaison
 
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
1比1制作(swansea毕业证书)英国斯旺西大学毕业证学位证书托业成绩单原版一模一样
 
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
办理(waikato毕业证书)新西兰怀卡托大学毕业证双学位证书原版一模一样
 
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
在线办理(SU毕业证书)美国雪城大学毕业证成绩单一模一样
 
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...
 
定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样
定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样
定制(nus毕业证书)新加坡国立大学毕业证学位证书实拍图原版一模一样
 
Tax Law Notes on taxation law tax law for 10th sem
Tax Law Notes on taxation law tax law for 10th semTax Law Notes on taxation law tax law for 10th sem
Tax Law Notes on taxation law tax law for 10th sem
 

MERGERS & ACQUISITION - PPT.ppt PRESENTATION

  • 1.
  • 2. Scope of Presentation: • Key Terms • Merger v/s Acquisition • Reasons for M & A • Types of Acquisition • Problems in achieving success MERGERS & ACQUISITION
  • 3. MERGER: Where Assets and Liabilities of one company are transferred to another and the first company loses its existence. MERGERS & ACQUISITION
  • 5. MERGERS & ACQUISITION AMALGAMATION: Where two or more companies carrying on similar business go into liquidation and a new company is formed to take over their business.
  • 6. MERGERS & ACQUISITION ACQUISITION: A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm.
  • 7. MERGERS & ACQUISITION How do Mergers and Acquisitions Differ? • The words are often used interchangeably even though they mean something very different. • Merger sounds more amicable, less threatening.
  • 8. h MERGERS & ACQUISITION Mergers Acquisitions • Two firms are combined on relatively co-equal basis. • Parent stocks are usually retired and new stock issued. • Name may be one of the parents’ or a combination. • One of the parents usually emerges as the dominant management. • One firm buys another firm. • Can be a controlling share, a majority, or all of the target firm’s stock. • Can be friendly or hostile. • Usually done through a tender offer.
  • 9. Why go for Mergers & Acquisitions 1)Increased market power: Exists when a firm is able to sell its goods or services above competitive levels or when the costs of its primary or support activities are lower than those of its competitors • Sources of market power include  Size of the firm  Resources and capabilities to compete in the market  Share of the market • Entails buying a competitor, a supplier, a distributor, or a business in a highly related industry MERGERS & ACQUISITION
  • 10. MERGERS & ACQUISITION Contd...... 2)To increase market power, firms use: • Horizontal Acquisitions Acquirer and acquired companies compete in the same industry • Vertical Acquisitions Firm acquires a supplier or distributor of one or more of its goods or services; leads to additional controls over parts of the value chain • Related Acquisitions Firm acquires another company in a highly related industry
  • 11. 3)Overcoming entry barriers into: • New product markets – product diversification • New international markets – geographic diversification Cross-border acquisitions – those made between companies with headquarters in different country MERGERS & ACQUISITION
  • 12. 4)Cost of new product development and increased speed to market: • Can be used to gain access to new products and to current products that are new to the firm • Quick approach for entering markets (product and geographic) MERGERS & ACQUISITION
  • 13. 5)Lower risk compared to developing new products: • Easier to estimate acquisition outcomes versus internal development • Internal development has a very high failure rate 6)Increased diversification: • Most common mode of diversification when entering new markets with new products • Hard to internally develop products that differ from current lines for markets in which a firm lacks experience • The more related the acquisition the higher the chances for success MERGERS & ACQUISITION
  • 14. 7)Reshaping firm’s competitive scope: • Can lessen a firms dependence on one or more products or markets 8)Learning and developing new capabilities: • When you acquire a firm you also acquire any skills and capabilities that it has • Firms should seek to acquire companies with different but related and complementary capabilities in order to build their own knowledge base MERGERS & ACQUISITION
  • 15. TYPES OF ACQUISITION 1)Friendly Acquisition A friendly Acquisition is done with the consent of the Target Company. Generally there is an agreement between the acquirer and the target company through negotiations 2)Hostile Acquisition Where an acquirer do not offer to Target Company the proposal to acquire its undertaking but unilaterally pursue efforts to gain control against the wishes of existing management MERGERS & ACQUISITION
  • 16. Problems in achieving Acquisition Success: MERGERS & ACQUISITION
  • 17. 1) Integration difficulties: • Most important determinant of shareholder value creation • Culture, financial and control systems, working relationships • Status of newly acquired firm’s executives 2)Inadequate evaluation of target • Due diligence – process through which a potential acquirer evaluates a target firm for acquisition • Can result in paying excessive premium for target company MERGERS & ACQUISITION
  • 18. 3) Large or extraordinary debt: High debt can negatively effect the firm • Increases the likelihood of bankruptcy • Can lead to a downgrade in a firm’s credit rating • May preclude needed investment in other activities that contribute to a firm’s long-term success – R&D, human resource training, marketing MERGERS & ACQUISITION
  • 19. 4) Inability to achieve synergy: Synergy: Value created by units exceeds value of units working independently – Achieved when the two firms' assets are complementary in unique ways – Generates gains in shareholder wealth that they could not duplicate or exceed through their own portfolio diversification decisions MERGERS & ACQUISITION
  • 20. Private synergy: Occurs when the combination and integration of acquiring and acquired firms' assets yields capabilities and core competencies that could not be developed by combining and integrating the assets with any other company – Very difficult to create private synergy • Firms tend to underestimate costs and overestimate synergy MERGERS & ACQUISITION
  • 21. 5) Too much diversification: – Firms can become over diversified which can lead to a decline in performance – Diversified firms must process more information of greater diversity – Scope created by diversification may cause managers to rely too much on financial rather than strategic controls to evaluate performance of business units – Acquisitions may become substitutes for innovation MERGERS & ACQUISITION
  • 22. 6) Managers overly focused on acquisitions: – Diverts attention from matters necessary for long-term competitive success (i.e., identifying other activities, interacting with important external stakeholders, or fixing fundamental internal problems) 7) Huge Size of Acquisition: – Bureaucratic controls: Formalized supervisory and behavioural rules and policies designed to ensure consistency of decisions and actions across different units of a firm – formalized controls decrease flexibility – Firms may produce less innovation. MERGERS & ACQUISITION