MERGER AND ACQUISITIONCATALYST TO ECONOMIC GROWTH

N. RUTHVIK115716672043

HISTORY

The concept of merger and acquisition in India was not popular until the year 1988.

In the year 1988 INDIA witnessed one of the oldest business acquisitions or company mergers.

It is the well-known ineffective unfriendly takeover bid by Swaraj Paul to overpower DCM Ltd. and Escorts Ltd.

WHAT IS A MERGER

A merger is a combination of two or more companies where all the companies loses their identities and a new company is being formed.

WHAT IS ACQUISITION

Acquisition essentially means ‘to acquire’ or ‘to takeover’. Here a bigger company will take over the shares and assets of the smaller company

ACQUISITION VS MERGER

TYPES OF M/A

MERGER /ACQUSITION

HORIZONTAL VERTICAL CONGLOMERATE

ACQUSITION

FRIENDLY HOSTILE

TYPES OF M/A

Differences

Aspect

Meaning

Decision Type

Expensive

Time Consumption

Merger

Merging Of Two Or More Organizations Into New One

It Is The Mutual Decision

Higher Legal Cost

Time Consuming, Has To Maintain Legal Issues

Acquisition

Buying Of One Or More Organizations By Another

It Can Be Friendly Takeover Or Hostile Takeover

Less Expensive Than Merger

It Is Faster And Easier Transaction

MOTIVES FOR M/A

Economies Of Large Scale

Business

Elimination Of Competition

Desire To Enjoy Monopoly

Power

Adoption Of Modern

Technology

BENEFITS OF M/A

ECONOMIESOF SCALE

BENEFITS OF M/A

MARKET LEADERSHIP

eg: HP &COMPAQ

BENEFITS OF M/A

MARKET ACCESS / ENTRY

BENEFITS OF M/A

PORTFOLIO DIVERSIFICATION

BENEFITS OF M/A

FORWARD INTEGRATION

BENEFITS OF M/A

BACKWARD INTEGRATION

PROBLEMS

Increased Business Complexity

Finance By Taking Huge Debt

Employees May Not Be Resistant To Change

Clash Of Corporate Cultures

Inability To Achieve Synergy

Inadequate Valuation Of Target

REGULATORY FRAMWORK

TRANSACTION STRUCTURE• COMPANIES ACT

2013

• COMPETITION ACT 2002

LISTED COMPANIES• SEBI

REGULATIONS• STOCK EXCHANGE

–LISTING AGREEMENTS

TRANS-BORDER TRANSACTIONS• FOREIGN

EXCHANGE MANAGEMENT ACT 1999

LEGAL PROCEDURE

Chapter XV of companies act

2013

Examination of object clause

Pass a board resolution

Intimation and approval from

share holders and creditors

Application to NCLT And petition for

approval

Intimation to stock exchanges

Filing order with ROC

Transfer of assets and liabilities

Issuance of cash/ cash equivalents

WHAT HAPPENS WHEN COCA COLA MERGERS WITH PEPSICO?

ROLE OF CCI

IN INDIA INVOLVING FOREIGN ENTERPRISE

FOR THE PARTIES FOR THE GROUP FOR THE PARTIES FOR THE GROUP

ASSETS1500 CR

ASSETS6000 CR

ASSETS750 M $

ASSETS3 BN $

TURNOVER4500 CR

TURNOVER18000 CR

TURNOVER2250 M $

TURNOVER9 BN $

• Mergers and acquisitions plays an important role in the corporate restructuring and development of the country.• It represents market and financial power.• The mergers and acquisitions have increased in India in

1990’s due to LPG policies.• When a company acquires or merges it depends upon its

planning and strategies whether they will be profited or loss.

CONCLUSION

Thank You