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Mergers and aquisitions strategy

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Sandeep Kulshrestha
Sandeep Kulshrestha

Mergers and acquisitions involve combining two companies to capitalize on their mutual strengths and synergies. A merger unifies two similar companies, while an acquisition involves a larger company purchasing a smaller one. These strategies allow companies to scale up operations, gain market share, and leverage each other's expertise and resources to improve profitability and shareholder value. Planning mergers and acquisitions requires analyzing strategic parameters like synergies, market opportunities, long-term vision, and value creation as well as conducting financial modeling, addressing governance, and integrating operations.

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Mergers and Acquisitions Strategy Dr. Sandeep Kulshrestha
Philosophy behind mergers and acquisitions  Part of the overall concept of “integration”  A merger capitalizes on “mutual synergy” of the Strengths of the merging entities  Acquiring an existing company is better strategy than scaling up on its own  It is also an strategy to showcase an organisation on a broader scale
Merger defined  A merger is unification of two or more firms into one entity, with an objective of better profitability and high value to the stakeholders”  In nutshell merger usually happens within companies who are in the similar line of business, with an objective to scale-up the operations Example: IDBI bank merged with United Western Bank
Acquisition defined  Acquisition normally signifies acquiring/buying of a smaller company by a large company in the similar line of business.  Acquisition can be either normal (by consent) or forced (by acquiring large amount of shares in a company) Example: United Breweries acquired Shaw Wallace’s liquor business.
The need of mergers and acquisitions  A well thought of corporate strategy to have substantial market share  Synergy of mutual expertise and experience, which helps in scaling up the market potential  Better reach of products and services  Acquiring another company or merging with another company gives a better leverage  Can lead to better Earning per share and shareholders’ expectations
Strategic Parameters  Synergy within corporations  Capitalization of the Strengths of merging companies/acquired company and nullification of weaknesses  The opportunity which the market may provide post merger/acquisitions  How the merger/acquisition will help the company’s long term vision  In short, what will be the value addition for a company!
Strategic Exercises  Financial modeling  Governance issues  Shareholding Patterns  Human Resources Strategy  Management of investments  Fund allocation for new activities  Re-framing of vision/mission  Marketing strategy  Fresh Branding exercises
Mergers and aquisitions strategy

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Mergers and aquisitions strategy

  • 1. Mergers and Acquisitions Strategy Dr. Sandeep Kulshrestha
  • 2. Philosophy behind mergers and acquisitions  Part of the overall concept of “integration”  A merger capitalizes on “mutual synergy” of the Strengths of the merging entities  Acquiring an existing company is better strategy than scaling up on its own  It is also an strategy to showcase an organisation on a broader scale
  • 3. Merger defined  A merger is unification of two or more firms into one entity, with an objective of better profitability and high value to the stakeholders”  In nutshell merger usually happens within companies who are in the similar line of business, with an objective to scale-up the operations Example: IDBI bank merged with United Western Bank
  • 4. Acquisition defined  Acquisition normally signifies acquiring/buying of a smaller company by a large company in the similar line of business.  Acquisition can be either normal (by consent) or forced (by acquiring large amount of shares in a company) Example: United Breweries acquired Shaw Wallace’s liquor business.
  • 5. The need of mergers and acquisitions  A well thought of corporate strategy to have substantial market share  Synergy of mutual expertise and experience, which helps in scaling up the market potential  Better reach of products and services  Acquiring another company or merging with another company gives a better leverage  Can lead to better Earning per share and shareholders’ expectations
  • 6. Strategic Parameters  Synergy within corporations  Capitalization of the Strengths of merging companies/acquired company and nullification of weaknesses  The opportunity which the market may provide post merger/acquisitions  How the merger/acquisition will help the company’s long term vision  In short, what will be the value addition for a company!
  • 7. Strategic Exercises  Financial modeling  Governance issues  Shareholding Patterns  Human Resources Strategy  Management of investments  Fund allocation for new activities  Re-framing of vision/mission  Marketing strategy  Fresh Branding exercises