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Mergers & acquisitions

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jaspreet singh
jaspreet singh

Mergers and acquisitions involve the combination of two or more companies. Mergers see the merging companies fully integrate to form an entirely new company, while acquisitions see one company purchase another but maintain separate operations. Mergers and acquisitions allow companies to achieve synergies, diversify, grow, and eliminate competition. Common types of mergers include horizontal, vertical, market extension, product extension, and conglomerate mergers. India has seen several large M&A deals over the years across various industries.

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MERGERS & ACQUISITIONS By- Prabhjot 112 Jaspreet 66 Mithun 82
Business Combination Why Business Combine??? -Synergy -Diversification -Growth -Eliminate Competition
MERGERS B usiness Amalgamation ACQUISITIONS C ombination Takeovers
When two or more companies combines into one company may merge with existing co, MERGER form new company…… in India merger is called Amalgamation
Merging Companies are called Amalgamating Companies MERGER New Company is called Amalgamated Company
MERGER Merger through Merger through ABSORPTION CONSOLIDATION
Merger Through Absorption An Absorption is Combination of two or more companies into an existing company All companies except one lose their identity
Example— • Absorption of Tata Fertilisers Ltd (TFL) by Tata Chemicals Ltd. (TCL) • Tata Oil Mills Ltd. (TOMCO) with Hindustan Lever Ltd. (HLL)
Merger Through Consolidation A consolidation is a combination of two or more Companies into a new Company All companies are dissolved to form a new Company
Example— Hindustan Computers Ltd + Hindustan Instruments Ltd + Indian Software Co. Ltd + Indian Reprographic Ltd = Hindustan Computers Ltd(HCL)
TYPES OF MERGER • Horizontal Merger • Vertical Merger • Market-extension Merger • Product-extension Merger • Conglomeration
TYPES OF MERGER 1 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. Example— • The formation of Brook Bond Lipton India Ltd. through the merger of Lipton India and Brook Bond • The merger of Bank of Mathura with ICICI (Industrial Credit and Investment Corporation of India) Bank
TYPES OF MERGER 2 Vertical Merger • This type of merger involves a customer and a company or a supplier and a company merging. Imagine a bat company merging with a wood production company. This would be an example of the supplier merging with the producer and is the essence of vertical mergers. Example— • Pixar & Disney
TYPES OF MERGER 3 Market-extension Merger • This involves the combination of two companies that sell the same products in different markets. A market-extension merger allows for the market that can be reached to become larger and is the basis for the name of the merger. Example- Dell’s Alienware Gaming Laptops
TYPES OF MERGER 4 Product-extension Merger • It takes place between two business organizations that deal in products that are related to each other and operate in the same market. Companies which sell different products of a related category.
TYPES OF MERGER 5 Conglomeration • It refers to the merger of companies, which do not either sell any related products or cater to any related markets. Here, the two companies entering the merger process do not possess any common business ties. Example— • Tata-Sky
ACQUISITION An Acquisition may be an act of acquiring effective control by one company over assets or management of another company without any combination of companies…….. Companies may remain independent, separate But there may be change in control of Companies……..
Example— -Godrej Consumer Care bought Keyline Brands -Dabur acquired Balsara
TAKEOVERS • A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publically traded, the acquiring company will make an offer for the outstanding shares.
Types Of Takeovers • Friendly Takeover- Also commonly referred to as ‘negotiated takeover’, a friendly takeover involves an acquisition of the target company through negotiations between the existing promoters and prospective investors. This kind of takeover is resorted to further some common objectives of both the parties.
• Hostile Takeover- A hostile takeover can happen by way of any of the following actions: if the board rejects the offer, but the bidder continues to pursue it or the bidder makes the offer without informing the board beforehand. Example- HP taking over COMPAQ
Why Should Firms Takeover??? • To gain opportunities of market growth • To seek gain benefits from economies of scale • To gain a more dominant position in the market • To acquire the skills or strengths of another firm to complement existing business • To diversify its products or service range in the market
India's 11 largest M&A deals • Tata Steel-Corus: $12.2 billion • Vodafone-Hutchison Essar: $11.1 billion • Hindalco-Novelis: $6 billion • Ranbaxy-Daiichi Sankyo: $4.5 billion • ONGC-Imperial Energy: $2.8 billion • NTT DoCoMo-Tata Tele: $2.7 billion • HDFC Bank-Centurion Bank of Punjab: $2.4 billion • Tata Motors-Jaguar Land Rover: $2.3 billion • Suzlon-RePower: $1.7 billion • RIL-RPL merger: $1.68 billion
Mergers & acquisitions
Mergers & acquisitions

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Mergers & acquisitions

  • 1. MERGERS & ACQUISITIONS By- Prabhjot 112 Jaspreet 66 Mithun 82
  • 2. Business Combination Why Business Combine??? -Synergy -Diversification -Growth -Eliminate Competition
  • 3. MERGERS B usiness Amalgamation ACQUISITIONS C ombination Takeovers
  • 4. When two or more companies combines into one company may merge with existing co, MERGER form new company…… in India merger is called Amalgamation
  • 5. Merging Companies are called Amalgamating Companies MERGER New Company is called Amalgamated Company
  • 6. MERGER Merger through Merger through ABSORPTION CONSOLIDATION
  • 7. Merger Through Absorption An Absorption is Combination of two or more companies into an existing company All companies except one lose their identity
  • 8. Example— • Absorption of Tata Fertilisers Ltd (TFL) by Tata Chemicals Ltd. (TCL) • Tata Oil Mills Ltd. (TOMCO) with Hindustan Lever Ltd. (HLL)
  • 9. Merger Through Consolidation A consolidation is a combination of two or more Companies into a new Company All companies are dissolved to form a new Company
  • 10. Example— Hindustan Computers Ltd + Hindustan Instruments Ltd + Indian Software Co. Ltd + Indian Reprographic Ltd = Hindustan Computers Ltd(HCL)
  • 11. TYPES OF MERGER • Horizontal Merger • Vertical Merger • Market-extension Merger • Product-extension Merger • Conglomeration
  • 12. TYPES OF MERGER 1 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. Example— • The formation of Brook Bond Lipton India Ltd. through the merger of Lipton India and Brook Bond • The merger of Bank of Mathura with ICICI (Industrial Credit and Investment Corporation of India) Bank
  • 13. TYPES OF MERGER 2 Vertical Merger • This type of merger involves a customer and a company or a supplier and a company merging. Imagine a bat company merging with a wood production company. This would be an example of the supplier merging with the producer and is the essence of vertical mergers. Example— • Pixar & Disney
  • 14. TYPES OF MERGER 3 Market-extension Merger • This involves the combination of two companies that sell the same products in different markets. A market-extension merger allows for the market that can be reached to become larger and is the basis for the name of the merger. Example- Dell’s Alienware Gaming Laptops
  • 15. TYPES OF MERGER 4 Product-extension Merger • It takes place between two business organizations that deal in products that are related to each other and operate in the same market. Companies which sell different products of a related category.
  • 16. TYPES OF MERGER 5 Conglomeration • It refers to the merger of companies, which do not either sell any related products or cater to any related markets. Here, the two companies entering the merger process do not possess any common business ties. Example— • Tata-Sky
  • 17. ACQUISITION An Acquisition may be an act of acquiring effective control by one company over assets or management of another company without any combination of companies…….. Companies may remain independent, separate But there may be change in control of Companies……..
  • 18. Example— -Godrej Consumer Care bought Keyline Brands -Dabur acquired Balsara
  • 19. TAKEOVERS • A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publically traded, the acquiring company will make an offer for the outstanding shares.
  • 20. Types Of Takeovers • Friendly Takeover- Also commonly referred to as ‘negotiated takeover’, a friendly takeover involves an acquisition of the target company through negotiations between the existing promoters and prospective investors. This kind of takeover is resorted to further some common objectives of both the parties.
  • 21. • Hostile Takeover- A hostile takeover can happen by way of any of the following actions: if the board rejects the offer, but the bidder continues to pursue it or the bidder makes the offer without informing the board beforehand. Example- HP taking over COMPAQ
  • 22. Why Should Firms Takeover??? • To gain opportunities of market growth • To seek gain benefits from economies of scale • To gain a more dominant position in the market • To acquire the skills or strengths of another firm to complement existing business • To diversify its products or service range in the market
  • 23. India's 11 largest M&A deals • Tata Steel-Corus: $12.2 billion • Vodafone-Hutchison Essar: $11.1 billion • Hindalco-Novelis: $6 billion • Ranbaxy-Daiichi Sankyo: $4.5 billion • ONGC-Imperial Energy: $2.8 billion • NTT DoCoMo-Tata Tele: $2.7 billion • HDFC Bank-Centurion Bank of Punjab: $2.4 billion • Tata Motors-Jaguar Land Rover: $2.3 billion • Suzlon-RePower: $1.7 billion • RIL-RPL merger: $1.68 billion