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