Technology transfer is the process by which basic science research and fundamental discoveries

are developed into practical and commercially relevant applications and products. To achieve
success in a hi-tech area, while synergy between science and technology development is the first
requisite, an organic linkage between the laboratory developing the technology and the industry
receiving the technology is the second requisite. In India, technology transfer from public funded
research institutions to industry happens in various ways, either the research organizations have a
special cell or department for a liaison between the research organization and industry e.g.

 Antrix of Indian Space Research Organisation (ISRO)

 C-Tech of Defence Research and Development Organisation (DRDO)
 Centre for Scientific and Industrial Consultancy (CSIC) of Indian Institute of Science
 Industrial Research & Consultancy Centre (IRCC) of Indian Institute of technology,
Bombay
 Foundation for Innovation and Technology Transfer (FITT) of Indian Institute of
Technology, Delhi
 Sponsored Research and Industrial Consultancy (SRIC) of Indian Institute Technology,
Kharagpur
 Technology Licensing Cell (TLC) of Research Institutes like TLC of Bhaba Atomic
Research Centre

or there is an organization as interface between research organizations and Industry e.g. National
Research Development Corporation (NRDC) and Biotech Consortium India Limited (BCIL).

National Research Development Corporation

It is a premier Knowledge Transfer Organisation (KTO) in India. It is a Section 25 Company

established in December 1953 under the Ministry of Science and Technology with a mandate to
commercialise, to develop and promote indigenously developed technologies from universities,
individual inventors, national R & D Institutions, etc. [www.nrdcindia.com/index.html].  It has
been playing a very significant role in providing a vital link between research network and
industry in the country.

It has commercialised technologies in India and abroad and exported technologies, turnkey
projects and services to countries both in the developed and under developed world. NRDC has
taken on the task of acquisition, evaluation, development and transfer of technologies generated
at the various national laboratories irrespective of the stage at which they have been developed.
One of NRDC’s most important functions has been to make sure that worthwhile inventions, be
it from the national laboratories, the private inventors, the small firm, budding innovator in the
University did not go unnoticed or unrecognised. In the past, NRDC has been willing to provide
assistance in developing a sound idea by providing direct financial support or make suitable
arrangements for production under licence.

Over these years the Corporation has acquired more than 2000 technologies from different
sources [www.nrdcindia.com/case.htm]. Up till 1986 CSIR had depended on NRDC for its
marketing of know-how. NRDC had the sole and absolute right to unencumbered intellectual
property produced by CSIR laboratories. Abid Hussain Committee (1986) recommended that
NRDC monopoly on know-how generated in CSIR laboratories should end and CSIR
laboratories be  free to license and commercialise technologies through whatever source they
choose to.

1.  Mechanism of Technology transfer:  Usually all the incoming technologies undergo a

preliminary evaluation by the in-house engineers of the Corporation. Wherever expertise is not
available in NRDC, services of consultancy organisations are availed of. Exposures to the
entrepreneurs on the availability of know-how for commercial exploitation are done through
advertisements, publications and get-togethers. Of late, the Corporation initiated a Knowledge
Management Scheme in which all technologies inflows are screened by experts in the area and
value addition is done to make better package deals.

Actual transfer of technology takes place after a legal agreement is executed by the client and
NRDC which provides for certain initial payment and also royalty at a fixed percentage of sales
value for a specified period. The agreement also provides for mutual exchange of information
during the tenure of the agreement thus making available to licensee any improvements in the
technology during the contract period.

The technologies available with NRDC for commercial exploitation cover a wide range of

sectors which includes drugs and pharmaceuticals, machinery, pesticides and herbicides,
plasticizers, resins, electrochemical products and metallurgy, paints and varnishes, leather
chemicals and auxiliaries, food technology, electrical, electronics and instruments, building
materials, glass and ceramics, agro-based products etc.

2. Trends in Technology Transfer: Technology transfer disciplines have been passing through a

cycle. Mechanical technology was appropriate for a decade in 1950’s, chemical discipline
technologies in the 1960’s. Later it was import substitution and reverse engineering till economic
liberalization in 1990’s. At present life science and biotechnology related technologies are
prominent. Some successful technologies from 1960’s onward are Amul Baby Food, Pesticides,
Surgical sutures, Drugs, Cinema Arc carbon, Blood Bags, Heart Valve etc. Now some of the
successful technologies are Vaccines for cattle, biotechnology based drugs, etc.

3. Value Addition in the Technology Developed by NRDC: The commercialisation of unproven

lab scale technologies involves high risk and therefore entrepreneurs generally are not keen on
undertaking a venture based on such technologies. The Corporation therefore undertook several
programmes to promote these indigenous technologies. Many such technologies have been
developed through support from the corporation either through equity participation or
developmental loans or grants. The above background calls for a system for proper evaluation of
the technologies assigned to the Corporation and value addition to the extent possible for making
a complete technology package for the entrepreneur/industry so that setting up a commercial
plant becomes easier and the chances of success become high.

4. Knowledge Management System (KMS): For achieving KMS objectives, three expert panels
have been formed: one each for Biotechnologies, Agriculture Related technologies and 
Ayurveda & Herbal Technologies. The Expert Panels have advised a number of steps for value
addition in a number of technologies. As a result of this, a number of technologies have been
assigned and commercialised or are in an advanced stage of readiness for commercialization.

5. Market Surveys: Market survey for a technology is the key factor in getting advantage over
competitors in the market. The survey provides important information required to identify and
analyze the market need, market size and competition. Industry analysis & business research is
helpful in decision making for launching new products in the market. To make the technology
package complete, the Corporation carries out Market survey studies in-house and also by
engaging outside consultants.

6. Basic Engineering Design Packages and Consultancy (BEDP): To bridge the gap between
the laboratory scale technology and commercially acceptable technology, it is essential that a
basic engineering design package is developed, which comprises of data required by the
entrepreneur before setting up the commercial plant and also assist the entrepreneur in
commercialisation of technology much faster.

7. Angel Funding by way of Equity: In order to encourage and develop first generation
entrepreneurs, specially technologists, technocrats and professionals to enlarge the technological
entrepreneurial base in the country, the Corporation is providing Angel funding by way of equity
to the entrepreneurs who have their incubatee Companies based in Incubators supported by
Department of Science and Technology.  The funding ranges from Rs. 10 lakhs to 30 lakhs based
upon the scheme; assistance in soft terms being provided to entrepreneurs who are eligible, to
promote risk oriented projects entailing the use of advanced and/or complex technologies or
projects for the manufacture of new products from the new application. The financial presence of
corporation in the venture not only lends credibility to the project but also builds confidence in
the promoters, industry and other financial institutions in the prospects of the technology.

Case Study 1: Disposable Blood Bag Technology

Disposable Bio-Medical plastic bags for collection, storage, transportation and transfusion of
blood & blood components. The technology provides a hygienic way by eliminating
exhaustive cleaning, rinsing, autoclaving and breakage problems. All manufacturing
operations are in conformity to GMP. Bags are available as single, double or triple transfer
bags. Product has been accepted internationally and exported to Africa, South-East Asia and
Europe.

Technology Development:    It was developed by Sri Chitra Thirunal Institute for Medical
Sciences and Technology, Thiruvananthapuram at an estimated expenditure of Rs. 0.2 m
funded by NRDC during 1977-78 and assigned to NRDC for Commercialisation during 1980.
 
Technology Transfer by NRDC: The first licensee was Peninsula Polymers Ltd.,
Thiruvananthapuram in 1983. There was 25% Equity participation each
by NRDC and KSIDC. Technology transfer involved Rs. 0.3 m as fee and 3% Royalty for 10
years on non-exclusive mode in 1983. Agreement required Research Institute to provide
technical support.
 
Commercialisation:   Commissioned in 1986 with production established in 1987-88. Product
introduced in the market at Rs. 10 a bag compared to Rs. 30 a bag of Japanese origin. There
were initial snags in the technology. Commercialisation faced problems when Japanese
dumped the market with bags at Rs. 8. NRDC arranged anti-dumping duty by presenting
international data to the Government. The licensee started marketing the product successfully.
Performance wise it was a great success. Since 1987 it has been an excellent export to other
countries including Europe.
As a second licensee, technology was transferred to M/s Hindustan Latex Ltd in 1991.The
licensee paid Rs. 1.65 m as fee and 3 % royalty for 10 years on non-exclusive mode. The plant
was completed in 3 years and since then has been exporting. During 1994, two other licensees
were J Mitra & Company and Electro- medical and Allied Industries. Each paid Rs. 4.5 m as
fee and 3 % royalty for 10 years on non-exclusive mode to both companies.

Case Study 2: Lipoosomal Amphotericin-b

 

Amphotericin B is a Polyene Macrolide Antibiotic obtained from Streptomyces sp.

which has been in existence for over 3 decades and is known to be one of the most
potent Anti-fungal agents. The use of Amphotericin-B, however, has been limited to
topical application mainly because of its severe nephrotoxicity, cardiotoxicity, toxicity
to central nervous system and to the bone marrow. FUNGISOME TM, India’s first
Liposomal Amphoterician B- the new technology using liposome as a carrier and
delivery system for Amphotericin B is highly effective and less toxic as it can carry the
drug at the specific site and is required in much lower concentration

Technology Development:   Prof. B.K.  Bachhawat, Department of Bio-chemistry,

Delhi University initiated the work to develop and to make an affordable substitute of
AmBisome - a US Product. The research work was sponsored by Department of
Biotechnology. Soon after the formulation development was completed proving the
efficacy and substantiated pre-clinical work, the results were transferred to Seth GS
Medical College and KEM hospital, Mumbai for clinical evaluation. Dr. Neelima
Kshirsagar played a major role in the clinical evaluation of the process at Seth GS
Medical College. KEM along with other prominent hospitals of Mumbai carried out
clinical trails for treatment of this drug for serious and invasive systemic fungal
infection.

The clinical trials for kala-Azar were carried out by a team of specialists comprising
Dr. C.P. Thakur, the former Union Minister of Health along with others. After the
clinical trials were successfully completed the technology was formally handed over to
NRDC by DBT for licensing and commercialization.

Technology Transfer: Commercialization of technology failed to take off by first

licensee M/s Ace Diagnostics and Biotech Ltd. However, the same became a huge
success when subsequently licensed to M/s Lifecare Innovations. The technology was
licensed to the company in 1999 with license fee 25 lakh and royalty of 3% for 10
years to commercialize and further improve the formulation to overcome the doses
related toxicities of Amphotericin-B as compared to the imported lipid formulations
such as AmBisome, Ampholip (Abelcet) and Amphocil (Amphotek). Further R&D at
Lifecare Innovations led to the commercialization which was supported by Department
of Scientific and Industrial Research through Program Aimed at Technological Self
Reliance (PASTER scheme).Today as claimed by Lifecare Innovations Pvt. Ltd.
Fungisome is the least toxic drug available in the country in its category.Also, unlike
the imported drug , Fungisome comes in various doses thereby reducing wastage and
 cost,This drug is less than one-tenth the cost of the imported equivalent .

The Product- Liposomal Amphotericin B is marketed by M/s. Lifecare Innovations Pvt.
Ltd. as “FUNGISOME”.

“FUNGISOME” contains cholesterols essential for minimizing toxicity of

Amphotericin B to a safe level. It converts into several small unicellular liposomes
thereby substantially increases the therapeutic index. “FUNGISOME” requires
sonication for application which enhances the therapeutic index of the drug. Drug
administration is done in one hour.

Application- Liposomal Amphotericin B

(The “FUNGISOME”) is used for the treatment of Systemic Mycosis and Kala Azar. 
Serious and invasive Systemic Mycosis frequently occurs in patients of Organ
transplants, Dialysis and those undergoing Radio therapy/chemotherapy for Cancer,
AIDS etc. “FUNGISOME” is also used for the treatment of the victims of serious burn
injuries.

The successful commercialization of know-how depends on the long-term association

between the Licensee & the Licensor. It also depends on supports provided to the
licensee during the post-licensing period. Therefore, the relationship building between
the technology transfer organization and licensee is extremely important for success.
This is particularly important for the early stage companies. The commercialization of
Liposomal Amphotericin-B process is an example of such relationship. The success of
Liposomal Amphotericin B is a true example of a public-private partnership where
each of the partners has played their role successfully and meaningfully. As a result,
the product/technology on which the industries were initially apprehensive has become
a major success.

Case Study 3:  20 HP Tractors

 
 Development of a 20 HP Tractor with an easier utilization of implements, high field
efficiency , ideal for deep ploughing, trouble free performance, lesser consumption of
diesel and ability to pull heavy loads over steep gradients

The Development – The technology was developed by a CSIR laboratory - Central

Mechanical Engineering Institute (CMERI), Durgapur. It has 20 H.P. two cylinder
engine (2000 RPM); single lever automatic depth-cum-draft control hydraulic system;
universal three point linkage; front & rear wheel tracts-variable to cater to crop pattern;
Power Take Off (PTO). Design is patented in India and abroad (7 countries). It is
suitable for small farm holding.

Commercialization: It was commercialized by NRDC. Licensed to M/s Punjab

Tractors Ltd. (PTL) in December, 1972. An amount of Rs. 245.48 lakhs received as
premium and royalty.

Present Status - 20 HP Tractors: Mahindra & Mahindra (M&M) acquired 43.3% stake

in PTL from Actis group & Burman family at a price of Rs. 360 per share. M&M
invested Rs. 9000 m. Presently PTL is valued at over Rs. 20000 m. During 2005-06,
turnover by PTL was Rs. 10,245m and profit after tax was worth Rs. 1293.4 m.

 Case Study 4: Vaccine against Peste des petits Ruminants (PPR)

There was no vaccine available in India or elsewhere for protection of animals against
lineage 4 virus infection. The only option was to use the attenuated tissue culture
rinderpest (TCRP) virus vaccine or vaccine developed by Diallo et al. (1989) in France
using lineage-I PPR virus. There were some drawbacks in using those vaccines.
Therefore an attempt was made to develop a live-attenuated homologous vaccine from
an Indian strain of Peste des petits ruminants (PPR) virus, which would protect the
animals in India against PPR virus currently prevalent in India.

Technology Development: National Rinderpest Control Program was launched by

Indian Council of Agricultural Research (ICAR) during 1996. Indian Veterinary
Research Institute (IVRI), Izatnagar was funded to undertake the research and develop
the vaccine. The technology relates to development of vaccine against Peste des
petits ruminants (PPR) using a lineage 4 virus isolated in India. Introduction of wild
virus (goat derived virus) in unnatural hosts (Vero cells) results in attenuation of the
virus. This virus has ability to induce protection against specific disease without
causing any pathogenicity. Keeping this scientific basis/fact in mind invention led to a
great success in development of PPR vaccine and protection against PPR in sheep and
goat population.

The developed vaccine was tried on animals at laboratory level and then at state level.
The technology was transferred to NRDC for commercialization. However, the
developed technology required further development for industrial use.

Value addition by NRDC: NRDC worked towards -- exact identification of strain,

basic engineering and data generation for the up-scalement of the plant.

Commercialization of Vaccine: Technology was successfully commercialized by

NRDC to two leading vaccine manufacturing companies of India, Indian
Immunological Ltd (IIL), Hyderabad and Intervet Ltd, Pune. NRDC agreement with
IIL was signed during 2004. Rs. 2.5 million was received as licensee fee (70% share
for IVRI) with a royalty at 3% for 10 years.

IVRI at its Mukteswar and Izatnagar campuses has annual sale of about Rs. 10 million
since 2005/06. Indian Immunological has sold vaccines worth more than Rs. 2 crores.
Intervet has also scaled up the vaccine production process.

Advantages of Vaccine technology: The technology provides easy and convenient

methods for vaccine quality control using B95a cell line. The vaccine produced is
potent, cost-effective and more convenient for field application. Vaccine immunity is
long lasting. It will not interfere with Rinderpest eradication campaign

The technology developed is mainly for the developing countries as the technology
does not require very high degree of expertise and sophisticated infrastructure. Both
these are affordable to developing countries. Goat and sheep husbandry practices are
common to developing countries as goat is popularly called poor man’s cow in India.
This is the only vaccine lineage of virus acceptable in entire Asian region and Middle
East countries.
 By employing the developed PPR vaccine the disease can be controlled in 200 million
small ruminant populations in the country. This will in turn increase the production of
small ruminants and profitability, especially in case of small and marginal farmers.
Control of the disease will also help increase trade of small ruminants. The country can
also benefit by exporting the vaccine to neighboring Asian Countries where viruses of
similar genetic make up (Asian Lineage) are known to circulate.
 

Biotech Consortium India Limited (BCIL)

BCIL was incorporated as a public limited company in 1990 under the Indian Companies Act
1956. It is promoted by the Department of Biotechnology, Government of India and financed by
the All India Financial Institutions including IDBI, ICICI, IFCI, UTI and IFCI Venture Capital
Funds Limited (formerly RCTC) and the corporate sector including Ranbaxy
Laboratories, Glaxo India, Cadila Laboratories, Lupin Laboratories, Kothari Sugars and
Chemicals, Rallis India, SPIC, Madras Refineries, Zuari Agro, EID Parry, ACC and Excel
Industries.

BCIL has been actively involved in technology transfer, project consultancy, fund syndication,
information dissemination, and manpower training & placement related to biotechnology over
the last one and a half decades. BCIL acts as an interface between technology sources and
technology seekers both within and outside the country. By virtue of the network of national and
international linkages established by BCIL, it assists in technology sourcing, marketing tie-ups
and identification of joint venture partners.

Technology Transfer Mechanism: To facilitate the transfer of indigenous technologies, Biotech

Consortium India Limited (BCIL) undertakes a methodical stepwise approach consisting
of: screening for leads, evaluation, validation, scaling-up, packaging, technology pricing,
entrepreneur selection, technology transfer, monitoring, support and consultancy.

There are number of technologies available and many of them have already been transferred to
industries [www.bcil.nic.in/technology_transfer.htm]. The role of BCIL does not end after the
transfer of technology to the industry. BCIL makes full efforts in the successful
commercialization of the technology by the licensee and continues to be a link between the
technology transferee and the technology recipient.
 MERGERS ACQUISITIONS JOINT VENTURES AND STRATEGIC ALLIANCES
You can expand your business by joining forces with another business. While this can create
more shared decision-making and possible management and staff issues to resolve, there can be
clear advantages. Successful co-operation can deliver:

 more resources
 sharing of the managerial load
 larger skills and talent base
 bigger pool of contacts
 increase in markets
 diversification and organic growth using increased resources
 reduced commercial risk
Mergers and Acquisitions:
Mergers and acquisitions (M&A) are more popular form of partnerships which is simpler to
understand. Two companies together are more valuable than two separate companies - at least,
that's the reasoning behind M&A. A merger happens when two firms, often of about the same
size, agree to go forward as a single new company rather than remain separately owned and
operated. This kind of action is more precisely referred to as a "merger of equals." Both
companies' stocks are surrendered and new company stock is issued in its place. When one
company takes over another and clearly established itself as the new owner, the purchase is
called an acquisition. From a legal point of view, the target company ceases to exist and the
buyer takes over its business. 

Partnerships and Joint Ventures:

Partnerships and joint ventures can offer both partners significant benefits, including sharing
experience, skills, people, equipment and customer bases. Through a partnership or joint venture
arrangement with a complementary, non-competitive business, you may be able to open new
markets or improve your offer to existing ones. It's important to be very careful who you link up
with. An agreement defining the terms of the partnership or joint venture is essential and further
legal protection is advisable. Teaming up must be a win-win situation for both parties.
Businesses involved with complementary activities or skills are usually the most appropriate
candidates. For example, a group of sole traders - a carpenter, builder and electrician - could
form a company, which could increase their credibility in the construction trade and allow them
to bid for larger contracts. A group like this also represents greater customer appeal, as it's a one-
stop shop.

A joint venture (JV) is a legal partnership between two (or more) companies wherein they both
make a new (third) entity for competitive advantage. With a JV you will have something more
than simple governance; you'll have a completely new entity with a board, officers, and an
executive team. Effectively a JV is a completely new organization, but owned by the founding
participants. The board of directors generally is comprised of representatives of the founding
organizations.

Strategic Alliance:
A strategic alliance is a kind of partnership between two entities in which they take advantage of
each other’s core strengths like proprietary processes, intellectual capital, research, market
penetration, manufacturing and/or distribution capabilities etc. They share their core strengths
with each other. They will have an open door relationship with another entity and will mostly
retain control. The length of agreement could have a sunset date or could be open-ended with
regular performance reviews. However, they simply would want to work with the other
organizations on a contractual basis, and not as a legal partnership.

To choose the best strategy for growth, you'll need to undertake an analysis of your business'
current performance. Once you have carried out the review, focus on the option that looks the
most logical. Next, make sure this option is also the most practical. Check that the strategy
reflects the things your business does well. You'll also need to assess whether you have resources
and capacity to make the strategy work.

Strategic Alliances: Collaborations, Mergers and

Acquisitions and Joint Ventures
One of the most powerful means to strengthen an organization's impact and
sustainability is by engaging in a strategic alliance or combining with other
organizations. There are a variety of ways this can be structured. Organizations face
pressure from funders and investors to efficient collaborate with other organizations.
Mergers and acquisitions are a very prominent strategy, especially among large
businesses. This topic briefly explains collaborations, mergers and acquisitions and joint
ventures.

In their book, Forming Alliances: Working Together to Achieve Mutual Goals, Hoskins

and Angelica define an alliance as a relationship between partners that is strategically
formed to accomplish goals that benefit the community while strengthening the
partners. The authors depict a continuum of alliances that continues from a very loose
relationship to a complete merger.

1. Cooperation – Shorter-term informal relationships that exist without any clearly

defined mission, structure, or planning effort.
2. Coordination – Longer-term, more formal relationships that rely on
understanding of missions and focus on a specific effort or programs
3. Collaboration – Most durable and pervasive relationships where participants
bring separate organizations into a new structure with full commitment and
common mission. (from Winer and Ray’s Collaboration Handbook: Creating,
Sustaining, and Enjoying the Journey)
4. Merger – A partnership in which two or more corporations decide to become one
(from LaPiana’s The Nonprofit Mergers Workbook)

NOTE: LaPiana adds more detail to options for partnering and organizes them into three
categories: collaborations, strategic alliances (administrative consolidation and joint
programming, and corporate integration (management service organization, joint
ventures, parent-subsidiaries and mergers).
There are five commonly-referred to types of business combinations known as mergers:
conglomerate merger, horizontal merger, market extension merger, vertical merger and
product extension merger. The term chosen to describe the merger depends on the
economic function, purpose of the business transaction and relationship between the
merging companies.

Conglomerate

A merger between firms that are involved in totally unrelated business activities. There
are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers
involve firms with nothing in common, while mixed conglomerate mergers involve firms
that are looking for product extensions or market extensions.

Example

A leading manufacturer of athletic shoes, merges with a soft drink firm. The resulting
company is faced with the same competition in each of its two markets after the merger
as the individual firms were before the merger. One example of a conglomerate merger
was the merger between the Walt Disney Company and the American Broadcasting
Company.

Benefits of a Merger or Acquisition

Horizontal Merger

A merger occurring between companies in the same industry. Horizontal merger is a

business consolidation that occurs between firms who operate in the same space, often
as competitors offering the same good or service. Horizontal mergers are common in
industries with fewer firms, as competition tends to be higher and the synergies and
potential gains in market share are much greater for merging firms in such an industry.

Example

A merger between Coca-Cola and the Pepsi beverage division, for example, would be
horizontal in nature. The goal of a horizontal merger is to create a new, larger
organization with more market share. Because the merging companies' business
operations may be very similar, there may be opportunities to join certain operations,
such as manufacturing, and reduce costs.

Market Extension Mergers

A market extension merger takes place between two companies that deal in the same
products but in separate markets. The main purpose of the market extension merger is
to make sure that the merging companies can get access to a bigger market and that
ensures a bigger client base.

Example
A very good example of market extension merger is the acquisition of Eagle
Bancshares Inc by the RBC Centura. Eagle Bancshares is headquartered at Atlanta,
Georgia and has 283 workers. It has almost 90,000 accounts and looks after assets
worth US $1.1 billion.

Eagle Bancshares also holds the Tucker Federal Bank, which is one of the ten biggest
banks in the metropolitan Atlanta region as far as deposit market share is concerned.
One of the major benefits of this acquisition is that this acquisition enables the RBC to
go ahead with its growth operations in the North American market.

With the help of this acquisition RBC has got a chance to deal in the financial market of
Atlanta , which is among the leading upcoming financial markets in the USA. This move
would allow RBC to diversify its base of operations.

Product Extension Mergers

A product extension merger takes place between two business organizations that deal
in products that are related to each other and operate in the same market. The product
extension merger allows the merging companies to group together their products and
get access to a bigger set of consumers. This ensures that they earn higher profits.

Example

The acquisition of Mobilink Telecom Inc. by Broadcom is a proper example of product

extension merger. Broadcom deals in the manufacturing Bluetooth personal area
network hardware systems and chips for IEEE 802.11b wireless LAN.

Mobilink Telecom Inc. deals in the manufacturing of product designs meant for handsets
that are equipped with the Global System for Mobile Communications technology. It is
also in the process of being certified to produce wireless networking chips that have
high speed and General Packet Radio Service technology. It is expected that the
products of Mobilink Telecom Inc. would be complementing the wireless products of
Broadcom.

Vertical Merger

A merger between two companies producing different goods or services for one specific
finished product. A vertical merger occurs when two or more firms, operating at different
levels within an industry's supply chain, merge operations. Most often the logic behind
the merger is to increase synergies created by merging firms that would be more
efficient operating as one.

Example

A vertical merger joins two companies that may not compete with each other, but exist
in the same supply chain. An automobile company joining with a parts supplier would be
an example of a vertical merger. Such a deal would allow the automobile division to
obtain better pricing on parts and have better control over the manufacturing process.
The parts division, in turn, would be guaranteed a steady stream of business.

Synergy, the idea that the value and performance of two companies combined will be
greater than the sum of the separate individual parts is one of the reasons companies
merger.