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Merger & acquisition


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Merger & acquisition

  1. 1. Motilal Nehru National Institute of technology School Of Management studies Presented ByUjjwal Mishra 2012MB01 Satish Aarya 2012MB02 Nidhi Kumari 2012MB04 Tarun Talreja 2012MB05 1
  2. 2. Table of Content      Merger and Acquisition Types of M & A Reasons for M & A List Of Merged Companies List Of Acquired Companies 2
  3. 3. Merger A merger refers to the process whereby at least two companies combine to form one single company. ACQUISITION When a smaller company gets bought by a larger one, who then acquires all of their stock and swallows it as part of their business. 3
  4. 4. Types of Merger  Horizontal Merger: It refers to the merger of two companies who are direct competitors of one another. They serve the same market and sell the same product.  Vertical Merger: It is effected either between a company and a customer or between a company and a supplier. 4
  5. 5. Conglomeration: It refers to the merger of companies, which do not either sell any related products or cater to any related market. Product-Extension Merger: It is executed among companies, which sell different products of a related category. They also seek to serve a common market. Market-Extension Merger: It occurs between two companies that sell identical products in different markets. It basically expands the market base of the product. 5
  6. 6. Types of Acquisition Asset Acquisition: If the assets to be acquired are not held in a separate legal entity, they must be purchased in an asset sale, rather than a stock sale, unless they can be organized into a separate legal entity prior to sale. Stock Acquisition: In a stock purchase, all of the assets and liabilities of the seller and sold upon transfer of the seller’s stock to the acquirer. As such, no tedious valuation of the seller’s individual assets and liabilities is required and the transaction is mechanically simple. 6
  7. 7. Reasons for Merger & Acquisition Revenues: By combining the two companies, we will realize higher revenues then if the two companies operate separately. Expenses: By combining the two companies, we will realize lower expenses then if the two companies operate separately. Cost of Capital: By combining the two companies, we will experience a lower overall cost of capital. Positioning: Taking advantage of future opportunities that can be exploited when the two companies are combined 7
  8. 8.  Gap Filling: One company may have a major weakness (such as poor distribution) whereas the other company has some significant strength. By combining the two companies, each company fillsin strategic gaps that are essential for long-term survival.  Organizational Competencies: Acquiring human resources and intellectual capital can help improve innovative thinking and development within the company.  Broader Market Access: Acquiring a foreign company can give a company quick access to emerging global markets. 8
  9. 9. List Of Merged Companies IBP-IOL Tata Steel - Corus Satyam-Tech Mahendra Air India - Indian Airlines iGate - Patni Computers Global Trust Bank - Oriental bank of Commerce. Mahindra Logisoft Business Solutions Ltd. - Tech Mahindra Ltd. Fortis Healthcare (India) Ltd. - Fortis Healthcare International Pvt. ltd. Pipetel Communications Pvt. Ltd. - Net 4 India Ltd. 9
  10. 10. List Of Acquired Companies  Aditya Birla - Columbian Chemicals  Mahindra & Mahindra - Ssangyong  The Vedanta - Cairn acquisition  GVK Power - Hancock Coal  Essar Energy’s - Stanlow Refinery  Vodafone - Hutch Essar  ONGC - Imperial Energy  HDFC Bank - Centurion Bank of Punjab  Tata Motors - Jaguar Land Rover 10
  11. 11. Acquisition Of Tata Motors and Jaguar & Land Rovers 11
  12. 12. Tata Motors Profile  Headquarter- Mumbai  Chairman-Ratan Tata  Parent- Tata Motors  Subsidiaries- jaguar & land rover  Products- automobiles and engines  Total revenue- Rs.123,133 crores  Total Profit- Rs.9,274 crores  India’s Largest automobile company 12
  13. 13. Jaguar and Land Rover’s Profile          Headquartered- Coventry, England Chairman- Ratan Tata Parent Company- Tata Motors Luxury & Sports car manufacturer Company Net revenue- 9,906 million Net Profit- 1,043 million Considered as a British icons Jaguar manufactured luxury cars Land Rover manufacture SUVs. 13
  14. 14. Features Of Acquisition  Acquisition of British Icons  The Deal  The Benefits  The Road Ahead 14