SlideShare a Scribd company logo
-By
RAVI SHEKAR S
MBA
REVA UNIVERSITY
INTRODUCTION
Mergers and acquisitions are increasingly becoming
strategic choice for organizational growth, and
achievement of business goals including profit,
empire building, market dominance and long
term survival. The ultimate goal of this is
however maximization of shareholder value.
The phenomenon of rising M&A activity is
observed world over across various continents,
although, it has commenced much earlier in
developed countries (as early as 1895 in US and
1920s in Europe), and is relatively recent in
developing countries.
WHAT IS MERGERS AND
ACQUISITION?
Mergers and acquisitions (M&A) are defined as
consolidation of companies.
 Mergers is the combination of two
companies to form one new company.
 The combination of the two companies
involves a transfer of ownership.
Both companies surrender their stock
and issue new stock as a new
company.
WAYS OF MERGER
A MERRGER CAN TAKES PLACE IN FOLLOWING
WAY:
 BUY PURCHASING COMMON SHARES
 BY EXCHANGING SHARES FOR ASSETS
 BY EXCHANGING SHARES FOR SHARES
 BUY PURCHASING OF ASSETS
1. Horizontal Mergers
2. Vertical Mergers
3. Conglomerate Mergers
4. Concentric Mergers
1.HORIZONTAL MERGERS
A Merger occurring between companies in the
same industry
2.VERTICAL MERGER
When two companies produce same goods
and services for one specific product
3.CONGLOMERATE MERGERS
A merger between firm involved in
totally unrelated business activity
4.CONCENTRIC MERGERS
The merger of firms which are into
similar type of business
AQUISITION
WHAT IS ACQUISITION?
When one company takes over
another and clearly established
itself as a new owner , the
purchase is called an acquisition
TYPES OF ACQUISITION?
1. Friendly acquisition
2. Reverse acquisition
3. Back flip acquisition
4. Hostile acquisition
1.FRIENDLY ACQUISITION
Both the companies approve the acquisition
under friendly terms.
EXAMPLE:
1.75 billion euro's ($2.37 billion)
Biotechnology
2.REVERSE ACQUISITION
A private company takes over a public
company.
EXAMPLE:
3.BACK FLIP ACQUISITION
The purchasing company becomes a
subsidiary of the purchased company.
EXAMPLE:
4.HOSTILE ACQUISITION
Here, the entire process is done by force.
EXAMPLE:
$10.3 billion
DIFFERENCES BETWEEN M&A
MERGERS ACQUISITION
BASIS
MEANING Fusion of two or more
companies voluntarily
form a new company
When one entity
purchases the business
of other entity
Formation of new
firm
yes no
purpose To decrease competition
& increase operational
efficiency
For instantaneous
growth
Size of business
Size of merging
companies is more or
less same
Size of the acquiring company
is bigger than acquired
company
No. of companies
involved
3 2
MERGERS:WHY & WHY NOT
WHY IS IT IMPORTANT
• Increase market share
• Economies of scale
• Profit for research and
development
• Reduction of competition
PROBLEM WITH MERGER
• Class of corporate cultures
• Increased business
complexity
• Employees may be resistant
to change
ACQUISITION:WHY & WHY NOT
WHY IS IT IMPORTANT
• Increase market share.
• Increased diversification.
• excessive competition
and cost maximization
PROBLEM WITH ACQUISITION
• Inadequate valuation of
target.
• Inability to achieve
synergy.
• Finance by taking huge
debt
MOTIVES FOR MERGERS & ACQUISITION
 Economies of large scale business:
Enjoys both internal and external economies.
 Elimination of competition:
It eliminates intense & wasteful expenditure by different
competing organization.
 Desire to enjoy monopoly power:
M&A leads to monopolistic control in the market.
 Adoption of modern technology:
corporate organization require large resources.
BENEFITS OF MERGERS & ACQUISITION
• Greater value generation:
M&A generally succeed in generating cost efficiency
through the implementation of economies of scale.
• Gaining cost efficiency:
The joint companies benefits in terms of cost
efficiency. as 2 firms form new bigger company.
• Increase in market share:
An increase in market share is one of the
possible benefits of M&A.
• Gain higher competitiveness:
The new firm is usually more cost-efficient and
competitive as compared to its financially weak parent
organization.
PROBLEMS OF MERGERS & ACQUISITION
• Integration difficulties
• Large or extraordinary debt
• Managers overly focused on acquisition
• Overly diversified
STRATEGIES OF MERGER AND
ACQUISITION
• There is an important need to assess the market
by deciding the growth factors through future
market opportunities .
• The integration process should be taken in line
with consent of management from both the
companies venturing into the merger.
• Restructuring and future parameters should be
decided with exchange of information and
knowledge from both ends.
TOP 5 MERGER AND
ACQUISITION DEALS
1.TATA STEEL–CORUS: ($12.2 billion)
COMPANY
TATA STEEL CORUS
IMAGE:
Mutharaman, Tata Steel MD
Ratan Tata, Tata Chairman
J.Leng, Corus Chairman
Varin, Corus CEO
India United Kingdom
 January 30,2007
 Largest Indian Takeover
 After the deal TATA’S became the 5th
largest STEEL company
 100 % stake in CORUS paying Rs 428/-
per share
2.VODAFONE-HUTCHISON ESSAR: ($11.1 billion)
COMPANY
IMAGE:
ARUN SARIN, CEO of Vodafone and
ASIM GHOSH, MD of Hutchison Essar
VODAFONE HUTCHISON ESSAR
United Kingdom India
 TELECOM sector
 11 February 2007
 2nd Largest takeover deal
 7 % stake holdings in Hutch
3.HINDALCO-NOVELIS: ($6 billion)
IMAGE:
KUMAR MANGALAM, Aditya Birla Group
Chairman.
STEVE FISHER, Novelis Chairman .
COMPANY
HINDALCO NOVELIS
 June 2008
 Hindalco aquired noviles
 Hindalco entered fortune-500 listing
of worlds largest companies by sales
revenue
4.RANBAXY- DAIICHI SANKYO ($4.5billion)
COMPANY
IMAGE:
MALVINDER SINGH, ex CEO of Ranbaxy.
TAKASHI SHODA, President & CEO of
Daiichi Sankyo.
RANBAXY DAIICHI SANKYO
India Japan
 Pharmaceuticals sector.
 June 2008.
 Largest ever deal in the indian pharma.
 Daiichi sankyo has mejarity stake of more
than 50 % in ranboxy .
 15th biggest drug maker.
5.ONGC–IMPERIAL ENERGY: ($2.8 billion)
CHRISTOPHER HOPKINSON, Imperial
ENERGY, CEO.
DINEDH KUMAR SARRAF, MD and chairmen,
ONGC.
IMAGE:
COMPANY
ONGC IMPERIAL ENERGY
India United Kingdom
 January 2009.
 Imperial energy company is one of the
biggest UK company.
 ONGC has 97 % of stake in Imperial
energy .
 ONGC wanted to tap Siberian market.
CONCLUSION
 LEARN FROM MISTAKE OF OTHERS.
 Example:
 DEFINE YOUR OBJECTIVES CLEARLY.
 Example:
 ACQUIRE EXPERTISE TO INTERPRET CHANGES.
 SWOT ANALYSIS FOR THE MERGED FIRM-A MUST.
$10.2 billion
$164 billion
mergers & aquisition.pdf

More Related Content

What's hot

Strategic control
Strategic controlStrategic control
Strategic control
roshangiri1
 
Business level strategy
Business level strategyBusiness level strategy
Business level strategy
apurva97
 
Types of international business
Types of international businessTypes of international business
Types of international business
ARUN G.P.
 
Five stage model of mergers and acquisitions
Five stage model of mergers and acquisitionsFive stage model of mergers and acquisitions
Five stage model of mergers and acquisitions
Dipeeka Saboo Betala
 
STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
IFTM UNIVERSITY MORADABAD
 
presentation about hostile takeover
presentation about hostile takeoverpresentation about hostile takeover
presentation about hostile takeover
ruth gyamfi
 
Models of strategy implementation by : Rajeh Altharah
Models of strategy implementation by : Rajeh AltharahModels of strategy implementation by : Rajeh Altharah
Models of strategy implementation by : Rajeh Altharah
RAJEH AL-THARRAH
 
Merger and acquisition
Merger and acquisitionMerger and acquisition
Merger and acquisition
Ruhull
 
PPT on merger & acuqisitions
PPT on merger & acuqisitionsPPT on merger & acuqisitions
PPT on merger & acuqisitionsITC Limited
 
Corporate control market
Corporate control marketCorporate control market
Corporate control market
ahmedowais
 
Merger,Acquisition&Takeovers
Merger,Acquisition&TakeoversMerger,Acquisition&Takeovers
Merger,Acquisition&Takeovers
amansingh09
 
Merger and acquisition
Merger and acquisitionMerger and acquisition
Merger and acquisition
SHASHANK CHOUDHARY
 
Strategic management
Strategic managementStrategic management
Strategic management
Harsh Arora
 
Merger And Aquisition Bs
Merger And Aquisition BsMerger And Aquisition Bs
Merger And Aquisition Bsrahulibsm
 
Techniques of Strategic Evaluation & Strategic
Techniques of Strategic Evaluation & Strategic Techniques of Strategic Evaluation & Strategic
Techniques of Strategic Evaluation & Strategic Manik Kudyar
 
Corporate restructuring
Corporate restructuringCorporate restructuring
Corporate restructuringSaurang Patel
 
Growth strategies in Strategic Management
Growth strategies in Strategic ManagementGrowth strategies in Strategic Management
Growth strategies in Strategic Management
Zeba Rukhsar
 
Merger and acquisition ppt
Merger and acquisition pptMerger and acquisition ppt
Merger and acquisition pptSwati Garg
 
Strategic implementation
Strategic implementationStrategic implementation
Strategic implementation
Anurag Srivastava
 

What's hot (20)

Strategic control
Strategic controlStrategic control
Strategic control
 
Business level strategy
Business level strategyBusiness level strategy
Business level strategy
 
Different levels of strategy
Different levels of strategyDifferent levels of strategy
Different levels of strategy
 
Types of international business
Types of international businessTypes of international business
Types of international business
 
Five stage model of mergers and acquisitions
Five stage model of mergers and acquisitionsFive stage model of mergers and acquisitions
Five stage model of mergers and acquisitions
 
STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
 
presentation about hostile takeover
presentation about hostile takeoverpresentation about hostile takeover
presentation about hostile takeover
 
Models of strategy implementation by : Rajeh Altharah
Models of strategy implementation by : Rajeh AltharahModels of strategy implementation by : Rajeh Altharah
Models of strategy implementation by : Rajeh Altharah
 
Merger and acquisition
Merger and acquisitionMerger and acquisition
Merger and acquisition
 
PPT on merger & acuqisitions
PPT on merger & acuqisitionsPPT on merger & acuqisitions
PPT on merger & acuqisitions
 
Corporate control market
Corporate control marketCorporate control market
Corporate control market
 
Merger,Acquisition&Takeovers
Merger,Acquisition&TakeoversMerger,Acquisition&Takeovers
Merger,Acquisition&Takeovers
 
Merger and acquisition
Merger and acquisitionMerger and acquisition
Merger and acquisition
 
Strategic management
Strategic managementStrategic management
Strategic management
 
Merger And Aquisition Bs
Merger And Aquisition BsMerger And Aquisition Bs
Merger And Aquisition Bs
 
Techniques of Strategic Evaluation & Strategic
Techniques of Strategic Evaluation & Strategic Techniques of Strategic Evaluation & Strategic
Techniques of Strategic Evaluation & Strategic
 
Corporate restructuring
Corporate restructuringCorporate restructuring
Corporate restructuring
 
Growth strategies in Strategic Management
Growth strategies in Strategic ManagementGrowth strategies in Strategic Management
Growth strategies in Strategic Management
 
Merger and acquisition ppt
Merger and acquisition pptMerger and acquisition ppt
Merger and acquisition ppt
 
Strategic implementation
Strategic implementationStrategic implementation
Strategic implementation
 

Similar to mergers & aquisition.pdf

Merger and Acquitions
Merger and AcquitionsMerger and Acquitions
Merger and Acquitionsskillfulyards
 
Mergers and acquistion
Mergers and acquistionMergers and acquistion
Mergers and acquistionShivli27
 
Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)
Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)
Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)
Anubhav Agrawal
 
Mergers and Acquisition-A Brief Study
Mergers and Acquisition-A Brief Study Mergers and Acquisition-A Brief Study
Mergers and Acquisition-A Brief Study
VINOD KUMAR RAMKUMAR
 
M&A-PPT.pptx
M&A-PPT.pptxM&A-PPT.pptx
M&A-PPT.pptx
LEDROIT1
 
Big Ideas HR Consulting Pvt. Ltd.
Big Ideas HR Consulting Pvt. Ltd.Big Ideas HR Consulting Pvt. Ltd.
Big Ideas HR Consulting Pvt. Ltd.
Big Ideas HR Consulting Private Limited
 
Mergers and aquisitions
Mergers and aquisitionsMergers and aquisitions
Mergers and aquisitionsTanuj Poddar
 
Mergers and Acquisitions by Big IT Jobs
Mergers and Acquisitions by Big IT Jobs Mergers and Acquisitions by Big IT Jobs
Mergers and Acquisitions by Big IT Jobs
Big IT Jobs
 
Merger & acquisition with case study
Merger & acquisition with case studyMerger & acquisition with case study
Merger & acquisition with case study
Praful Metange
 
Mergers and acquisitions
Mergers and acquisitionsMergers and acquisitions
Mergers and acquisitions
TanyaMatta1
 
Growth Strategies.pptx
Growth Strategies.pptxGrowth Strategies.pptx
Growth Strategies.pptx
Dhrupal Tripathi
 
HR challenges in mergers & acquistions
HR challenges in mergers & acquistionsHR challenges in mergers & acquistions
HR challenges in mergers & acquistions
Self-employed
 
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
 
Mergers & takeovers
Mergers & takeoversMergers & takeovers
Mergers & takeoversJagjit Raman
 
Top mergers acquisitions in telecom industry
Top mergers acquisitions in telecom industryTop mergers acquisitions in telecom industry
Top mergers acquisitions in telecom industry
Anit Vattoly
 
Integration of mergers for share holders
Integration of mergers for share holdersIntegration of mergers for share holders
Integration of mergers for share holders
arpanmahapatra
 
Mergers n acquisitions
Mergers n acquisitionsMergers n acquisitions
Mergers n acquisitionsumesh yadav
 

Similar to mergers & aquisition.pdf (20)

Merger and Acquitions
Merger and AcquitionsMerger and Acquitions
Merger and Acquitions
 
Mergers and acquistion
Mergers and acquistionMergers and acquistion
Mergers and acquistion
 
Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)
Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)
Mergers & Acquitions (Tata-Corus, Daimler-Chrysler)
 
Mergers and Acquisition-A Brief Study
Mergers and Acquisition-A Brief Study Mergers and Acquisition-A Brief Study
Mergers and Acquisition-A Brief Study
 
M&A-PPT.pptx
M&A-PPT.pptxM&A-PPT.pptx
M&A-PPT.pptx
 
Big Ideas HR Consulting Pvt. Ltd.
Big Ideas HR Consulting Pvt. Ltd.Big Ideas HR Consulting Pvt. Ltd.
Big Ideas HR Consulting Pvt. Ltd.
 
Mergers and aquisitions
Mergers and aquisitionsMergers and aquisitions
Mergers and aquisitions
 
Mergers and Acquisitions by Big IT Jobs
Mergers and Acquisitions by Big IT Jobs Mergers and Acquisitions by Big IT Jobs
Mergers and Acquisitions by Big IT Jobs
 
Merger & acquisition with case study
Merger & acquisition with case studyMerger & acquisition with case study
Merger & acquisition with case study
 
Mergers and acquisitions
Mergers and acquisitionsMergers and acquisitions
Mergers and acquisitions
 
Growth Strategies.pptx
Growth Strategies.pptxGrowth Strategies.pptx
Growth Strategies.pptx
 
HR challenges in mergers & acquistions
HR challenges in mergers & acquistionsHR challenges in mergers & acquistions
HR challenges in mergers & acquistions
 
Mergers and acquisitions
Mergers and acquisitionsMergers and acquisitions
Mergers and acquisitions
 
Mergers and acquisitions framework | Veristrat Inc.
Mergers and acquisitions framework | Veristrat Inc.Mergers and acquisitions framework | Veristrat Inc.
Mergers and acquisitions framework | Veristrat Inc.
 
Mergers & takeovers
Mergers & takeoversMergers & takeovers
Mergers & takeovers
 
strategies.pptx
strategies.pptxstrategies.pptx
strategies.pptx
 
Top mergers acquisitions in telecom industry
Top mergers acquisitions in telecom industryTop mergers acquisitions in telecom industry
Top mergers acquisitions in telecom industry
 
Integration of mergers for share holders
Integration of mergers for share holdersIntegration of mergers for share holders
Integration of mergers for share holders
 
GROWTH STRATEGIES
GROWTH STRATEGIESGROWTH STRATEGIES
GROWTH STRATEGIES
 
Mergers n acquisitions
Mergers n acquisitionsMergers n acquisitions
Mergers n acquisitions
 

Recently uploaded

Brand Analysis for an artist named Struan
Brand Analysis for an artist named StruanBrand Analysis for an artist named Struan
Brand Analysis for an artist named Struan
sarahvanessa51503
 
amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05
marketing317746
 
Premium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern BusinessesPremium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern Businesses
SynapseIndia
 
What are the main advantages of using HR recruiter services.pdf
What are the main advantages of using HR recruiter services.pdfWhat are the main advantages of using HR recruiter services.pdf
What are the main advantages of using HR recruiter services.pdf
HumanResourceDimensi1
 
Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...
Lviv Startup Club
 
anas about venice for grade 6f about venice
anas about venice for grade 6f about veniceanas about venice for grade 6f about venice
anas about venice for grade 6f about venice
anasabutalha2013
 
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdfModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
fisherameliaisabella
 
What is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdfWhat is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdf
seoforlegalpillers
 
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s Dholera
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraTata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s Dholera
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s Dholera
Avirahi City Dholera
 
Unveiling the Secrets How Does Generative AI Work.pdf
Unveiling the Secrets How Does Generative AI Work.pdfUnveiling the Secrets How Does Generative AI Work.pdf
Unveiling the Secrets How Does Generative AI Work.pdf
Sam H
 
April 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products NewsletterApril 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products Newsletter
NathanBaughman3
 
Improving profitability for small business
Improving profitability for small businessImproving profitability for small business
Improving profitability for small business
Ben Wann
 
FINAL PRESENTATION.pptx12143241324134134
FINAL PRESENTATION.pptx12143241324134134FINAL PRESENTATION.pptx12143241324134134
FINAL PRESENTATION.pptx12143241324134134
LR1709MUSIC
 
Skye Residences | Extended Stay Residences Near Toronto Airport
Skye Residences | Extended Stay Residences Near Toronto AirportSkye Residences | Extended Stay Residences Near Toronto Airport
Skye Residences | Extended Stay Residences Near Toronto Airport
marketingjdass
 
The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...
Adam Smith
 
Discover the innovative and creative projects that highlight my journey throu...
Discover the innovative and creative projects that highlight my journey throu...Discover the innovative and creative projects that highlight my journey throu...
Discover the innovative and creative projects that highlight my journey throu...
dylandmeas
 
The Parable of the Pipeline a book every new businessman or business student ...
The Parable of the Pipeline a book every new businessman or business student ...The Parable of the Pipeline a book every new businessman or business student ...
The Parable of the Pipeline a book every new businessman or business student ...
awaisafdar
 
The-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic managementThe-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic management
Bojamma2
 
Maksym Vyshnivetskyi: PMO Quality Management (UA)
Maksym Vyshnivetskyi: PMO Quality Management (UA)Maksym Vyshnivetskyi: PMO Quality Management (UA)
Maksym Vyshnivetskyi: PMO Quality Management (UA)
Lviv Startup Club
 
Cracking the Workplace Discipline Code Main.pptx
Cracking the Workplace Discipline Code Main.pptxCracking the Workplace Discipline Code Main.pptx
Cracking the Workplace Discipline Code Main.pptx
Workforce Group
 

Recently uploaded (20)

Brand Analysis for an artist named Struan
Brand Analysis for an artist named StruanBrand Analysis for an artist named Struan
Brand Analysis for an artist named Struan
 
amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05amptalk_RecruitingDeck_english_2024.06.05
amptalk_RecruitingDeck_english_2024.06.05
 
Premium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern BusinessesPremium MEAN Stack Development Solutions for Modern Businesses
Premium MEAN Stack Development Solutions for Modern Businesses
 
What are the main advantages of using HR recruiter services.pdf
What are the main advantages of using HR recruiter services.pdfWhat are the main advantages of using HR recruiter services.pdf
What are the main advantages of using HR recruiter services.pdf
 
Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...Kseniya Leshchenko: Shared development support service model as the way to ma...
Kseniya Leshchenko: Shared development support service model as the way to ma...
 
anas about venice for grade 6f about venice
anas about venice for grade 6f about veniceanas about venice for grade 6f about venice
anas about venice for grade 6f about venice
 
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdfModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
ModelingMarketingStrategiesMKS.CollumbiaUniversitypdf
 
What is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdfWhat is the TDS Return Filing Due Date for FY 2024-25.pdf
What is the TDS Return Filing Due Date for FY 2024-25.pdf
 
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s Dholera
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraTata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s Dholera
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s Dholera
 
Unveiling the Secrets How Does Generative AI Work.pdf
Unveiling the Secrets How Does Generative AI Work.pdfUnveiling the Secrets How Does Generative AI Work.pdf
Unveiling the Secrets How Does Generative AI Work.pdf
 
April 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products NewsletterApril 2024 Nostalgia Products Newsletter
April 2024 Nostalgia Products Newsletter
 
Improving profitability for small business
Improving profitability for small businessImproving profitability for small business
Improving profitability for small business
 
FINAL PRESENTATION.pptx12143241324134134
FINAL PRESENTATION.pptx12143241324134134FINAL PRESENTATION.pptx12143241324134134
FINAL PRESENTATION.pptx12143241324134134
 
Skye Residences | Extended Stay Residences Near Toronto Airport
Skye Residences | Extended Stay Residences Near Toronto AirportSkye Residences | Extended Stay Residences Near Toronto Airport
Skye Residences | Extended Stay Residences Near Toronto Airport
 
The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...The Influence of Marketing Strategy and Market Competition on Business Perfor...
The Influence of Marketing Strategy and Market Competition on Business Perfor...
 
Discover the innovative and creative projects that highlight my journey throu...
Discover the innovative and creative projects that highlight my journey throu...Discover the innovative and creative projects that highlight my journey throu...
Discover the innovative and creative projects that highlight my journey throu...
 
The Parable of the Pipeline a book every new businessman or business student ...
The Parable of the Pipeline a book every new businessman or business student ...The Parable of the Pipeline a book every new businessman or business student ...
The Parable of the Pipeline a book every new businessman or business student ...
 
The-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic managementThe-McKinsey-7S-Framework. strategic management
The-McKinsey-7S-Framework. strategic management
 
Maksym Vyshnivetskyi: PMO Quality Management (UA)
Maksym Vyshnivetskyi: PMO Quality Management (UA)Maksym Vyshnivetskyi: PMO Quality Management (UA)
Maksym Vyshnivetskyi: PMO Quality Management (UA)
 
Cracking the Workplace Discipline Code Main.pptx
Cracking the Workplace Discipline Code Main.pptxCracking the Workplace Discipline Code Main.pptx
Cracking the Workplace Discipline Code Main.pptx
 

mergers & aquisition.pdf

  • 2.
  • 3.
  • 4. INTRODUCTION Mergers and acquisitions are increasingly becoming strategic choice for organizational growth, and achievement of business goals including profit, empire building, market dominance and long term survival. The ultimate goal of this is however maximization of shareholder value. The phenomenon of rising M&A activity is observed world over across various continents, although, it has commenced much earlier in developed countries (as early as 1895 in US and 1920s in Europe), and is relatively recent in developing countries.
  • 5. WHAT IS MERGERS AND ACQUISITION? Mergers and acquisitions (M&A) are defined as consolidation of companies.
  • 6.
  • 7.  Mergers is the combination of two companies to form one new company.  The combination of the two companies involves a transfer of ownership. Both companies surrender their stock and issue new stock as a new company.
  • 8. WAYS OF MERGER A MERRGER CAN TAKES PLACE IN FOLLOWING WAY:  BUY PURCHASING COMMON SHARES  BY EXCHANGING SHARES FOR ASSETS  BY EXCHANGING SHARES FOR SHARES  BUY PURCHASING OF ASSETS
  • 9. 1. Horizontal Mergers 2. Vertical Mergers 3. Conglomerate Mergers 4. Concentric Mergers
  • 10. 1.HORIZONTAL MERGERS A Merger occurring between companies in the same industry
  • 11. 2.VERTICAL MERGER When two companies produce same goods and services for one specific product
  • 12. 3.CONGLOMERATE MERGERS A merger between firm involved in totally unrelated business activity
  • 13. 4.CONCENTRIC MERGERS The merger of firms which are into similar type of business
  • 15. WHAT IS ACQUISITION? When one company takes over another and clearly established itself as a new owner , the purchase is called an acquisition
  • 16. TYPES OF ACQUISITION? 1. Friendly acquisition 2. Reverse acquisition 3. Back flip acquisition 4. Hostile acquisition
  • 17. 1.FRIENDLY ACQUISITION Both the companies approve the acquisition under friendly terms. EXAMPLE: 1.75 billion euro's ($2.37 billion) Biotechnology
  • 18. 2.REVERSE ACQUISITION A private company takes over a public company. EXAMPLE:
  • 19. 3.BACK FLIP ACQUISITION The purchasing company becomes a subsidiary of the purchased company. EXAMPLE:
  • 20. 4.HOSTILE ACQUISITION Here, the entire process is done by force. EXAMPLE: $10.3 billion
  • 21. DIFFERENCES BETWEEN M&A MERGERS ACQUISITION BASIS MEANING Fusion of two or more companies voluntarily form a new company When one entity purchases the business of other entity Formation of new firm yes no purpose To decrease competition & increase operational efficiency For instantaneous growth Size of business Size of merging companies is more or less same Size of the acquiring company is bigger than acquired company No. of companies involved 3 2
  • 22. MERGERS:WHY & WHY NOT WHY IS IT IMPORTANT • Increase market share • Economies of scale • Profit for research and development • Reduction of competition PROBLEM WITH MERGER • Class of corporate cultures • Increased business complexity • Employees may be resistant to change
  • 23. ACQUISITION:WHY & WHY NOT WHY IS IT IMPORTANT • Increase market share. • Increased diversification. • excessive competition and cost maximization PROBLEM WITH ACQUISITION • Inadequate valuation of target. • Inability to achieve synergy. • Finance by taking huge debt
  • 24. MOTIVES FOR MERGERS & ACQUISITION  Economies of large scale business: Enjoys both internal and external economies.  Elimination of competition: It eliminates intense & wasteful expenditure by different competing organization.  Desire to enjoy monopoly power: M&A leads to monopolistic control in the market.  Adoption of modern technology: corporate organization require large resources.
  • 25. BENEFITS OF MERGERS & ACQUISITION • Greater value generation: M&A generally succeed in generating cost efficiency through the implementation of economies of scale. • Gaining cost efficiency: The joint companies benefits in terms of cost efficiency. as 2 firms form new bigger company. • Increase in market share: An increase in market share is one of the possible benefits of M&A. • Gain higher competitiveness: The new firm is usually more cost-efficient and competitive as compared to its financially weak parent organization.
  • 26. PROBLEMS OF MERGERS & ACQUISITION • Integration difficulties • Large or extraordinary debt • Managers overly focused on acquisition • Overly diversified
  • 27. STRATEGIES OF MERGER AND ACQUISITION • There is an important need to assess the market by deciding the growth factors through future market opportunities . • The integration process should be taken in line with consent of management from both the companies venturing into the merger. • Restructuring and future parameters should be decided with exchange of information and knowledge from both ends.
  • 28. TOP 5 MERGER AND ACQUISITION DEALS
  • 29. 1.TATA STEEL–CORUS: ($12.2 billion) COMPANY TATA STEEL CORUS IMAGE: Mutharaman, Tata Steel MD Ratan Tata, Tata Chairman J.Leng, Corus Chairman Varin, Corus CEO India United Kingdom  January 30,2007  Largest Indian Takeover  After the deal TATA’S became the 5th largest STEEL company  100 % stake in CORUS paying Rs 428/- per share
  • 30. 2.VODAFONE-HUTCHISON ESSAR: ($11.1 billion) COMPANY IMAGE: ARUN SARIN, CEO of Vodafone and ASIM GHOSH, MD of Hutchison Essar VODAFONE HUTCHISON ESSAR United Kingdom India  TELECOM sector  11 February 2007  2nd Largest takeover deal  7 % stake holdings in Hutch
  • 31. 3.HINDALCO-NOVELIS: ($6 billion) IMAGE: KUMAR MANGALAM, Aditya Birla Group Chairman. STEVE FISHER, Novelis Chairman . COMPANY HINDALCO NOVELIS  June 2008  Hindalco aquired noviles  Hindalco entered fortune-500 listing of worlds largest companies by sales revenue
  • 32. 4.RANBAXY- DAIICHI SANKYO ($4.5billion) COMPANY IMAGE: MALVINDER SINGH, ex CEO of Ranbaxy. TAKASHI SHODA, President & CEO of Daiichi Sankyo. RANBAXY DAIICHI SANKYO India Japan  Pharmaceuticals sector.  June 2008.  Largest ever deal in the indian pharma.  Daiichi sankyo has mejarity stake of more than 50 % in ranboxy .  15th biggest drug maker.
  • 33. 5.ONGC–IMPERIAL ENERGY: ($2.8 billion) CHRISTOPHER HOPKINSON, Imperial ENERGY, CEO. DINEDH KUMAR SARRAF, MD and chairmen, ONGC. IMAGE: COMPANY ONGC IMPERIAL ENERGY India United Kingdom  January 2009.  Imperial energy company is one of the biggest UK company.  ONGC has 97 % of stake in Imperial energy .  ONGC wanted to tap Siberian market.
  • 34. CONCLUSION  LEARN FROM MISTAKE OF OTHERS.  Example:  DEFINE YOUR OBJECTIVES CLEARLY.  Example:  ACQUIRE EXPERTISE TO INTERPRET CHANGES.  SWOT ANALYSIS FOR THE MERGED FIRM-A MUST. $10.2 billion $164 billion