This document discusses mergers and acquisitions (M&A). It defines an acquisition as one company buying another to make it a subsidiary, while a merger combines two companies on an equal basis to create a stronger competitive advantage. Some key differences between mergers and acquisitions are provided. Several examples of major M&A deals involving Indian companies are outlined, including Tata Steel-Corus, Vodafone-Hutchison Essar, and RIL-RPL. The merger between Air India and Indian Airlines is also summarized. Finally, the basic process for M&A deals in India is outlined in several steps.

1. MERGERS & ACQUISITIONS
1

2. ACQUISITION
A transaction where one firms buys another firm with
the intent of more effectively using a core
competence by making the acquired firm a
subsidiary within its portfolio of business
 It also known as a takeover or a buyout
 It is the buying of one company by another.
 In acquisition two companies are combine together
to form a new company altogether.
Example: Company A+ Company B= Company A.

3. MERGER
o A transaction where two firms agree to integrate their
operations on a relatively co-equal basis because they
have resources and capabilities that together may create
a stronger competitive advantage.
o The combining of two or more companies, generally by
offering the stockholders of one company securities in
the acquiring company in exchange for the surrender of
their stock
o Example: Company A+ Company B= Company C.
3

4. DIFFERENCE BETWEEN MERGER AND
ACQUISITION:
MERGER ACQUISITION
i. Merging of two organization in
to one.
ii. It is the mutual decision.
iii. Merger is expensive than
acquisition(higher legal cost).
iv. Through merger shareholders
can increase their net worth.
v. It is time consuming and the
company has to maintain so
much legal issues.
vi. Dilution of ownership occurs
in merger.
i. Buying one organization by
another.
ii. It can be friendly takeover or
hostile takeover.
iii. Acquisition is less expensive
than merger.
iv. Buyers cannot raise their
enough capital.
v. It is faster and easier
transaction.
vi. The acquirer does not
experience the dilution of
ownership.

5. M&A DEALS…

6. 1. TATA STEEL-CORUS: $12.2 BILLION
 January 30, 2007
 Largest Indian take-over
 After the deal TATA’S
became the 5th largest
STEEL co.
 100 % stake in CORUS
paying Rs 428/- per
share
Image: B Mutharaman, Tata Steel MD; Ratan
Tata, Tata chairman; J Leng, Corus chair;
and P Varin, Corus CEO.

7. 2. VODAFONE-HUTCHISON ESSAR: $11.1
BILLION
TELECOM sector
11th February 2007
2nd largest
takeover deal
67 % stake holding
in hutch
Image: The then CEO of Vodafone
Arun Sarin visits Hutchison
Telecommunications head office in
Mumbai.

8. 11. RIL-RPL MERGER: $1.68 BILLION
March 2009
 Merger deal
amalgamation of its
subsidiary Reliance
Petroleum with the
parent company
Reliance industries
ltd.
 Rs 8,500 crore
 RIL-RPL merger
swap ratio was at
16:1
Image: Reliance Industries'
chairman Mukesh Ambani.

9. MERGER BETWEEN AIR INDIA AND
INDIAN AIRLINES
 The government of India on 1 march 2007
approved the merger of Air India and Indian airlines.
 Consequent to the above a new company called
National Aviation Company of India limited was
incorporated under the companies act 1956 on 30
march 2007 with its registered office at New Delhi.
9

10. PROCESS OF MERGER & ACQUISITION IN INDIA:
The process of merger and acquisition has the following steps:
i. Approval of Board of Directors
ii. Information to the stock exchange
iii. Application in the High Court
iv. Shareholders and Creditors meetings
v. Sanction by the High Court
vi. Filing of the court order
vii. Transfer of assets or liabilities
viii. Payment by cash and securities
Maximum Waiting period:210 days from the filing of notice(or
the order of the commission - whichever earlier).