Point-wise and brief description of all types with relevant pictures and examples.

2. MERGER
 When two or more companies
combine to become one company
 In India, Merger is called
Amalgamation
 May form a new company
May merge into an existingone

3. MERGER
THROUGH ABSORPTION:
Combine into an existing company
where one loses its identity
EXAMPLE : TATA Fertilizers Ltd. By
TATA Chemicals Ltd. , TATA Oil Mills
Ltd. By Hindustan Lever Ltd.
THROUGH CONSOLIDATION:
Two companies dissolved to
form a new company.
EXAMPLE: Hindustan
Computers Ltd.

4. TYPES OF
MERGER

5.  Merging of two companies who are direct competitors of each
other.
 Serve the same market and sell the same product.
VERTICAL MERGER
 Merging of two companies producing different goods and services
 Supplier mergingwith the produceris the essenceof Vertical Mergers.

6.  Merging companies do not possess any common business ties.
BENEFITS OF MERGER REASONS OF FAILURE
 Larger marketshare
 Increasein plant capacity
 Diversification of product and service
offerings
 Reduction of financial risk
 Utilization of operational expertise
and researchanddevelopment (R&D)
 Lack of human integration
 Mismanagement of cultural issues
 Lack of communication

7. ACQUISITION
 The act of acquiring effective control over the assets or
management of a company without any combination of companies.
 Companies may remain independent, separate but there is
changein control of the companies.

8. Rank Year Purchaser Purchased
Transaction value
(in mil. USD)
1 2000
America Online Inc.
(AOL)
Time Warner 164,747
2 2000 Glaxo- Welcome Plc.
SmithKline Beecham
Plc.
75,961
3 2004
Royal Dutch
Petroleum Co.
Shell Transport &
Trading Co
74,559
4 2006 AT&T Inc. BellSouth Corporation 72,671
5 2001 Comcast Corporation
AT&T Broadband &
Internet Services
72,041
6 2004 Sanofi-Synthelabo SA Aventis SA 60,243
7 2000
Spin-off: Nortel
Networks Corporation
59,974
8 2002 Pfizer Inc.
Pharmacia
Corporation
59,515
9 2004
JP Morgan Chase &
Co
Bank One Corp 58,761
TOP ACQUISITIONS

9. TAKE OVERS
 Purchase of a TARGET company by another ACQUIRER or
BIDDER.
Acquiring company becomes responsible for all holdings,
operations and debt.
In case of a Publicly-traded company, an offer is made for all its
outstanding shares.

10. TYPES OF TAKEOVERS
 FRIENDLY TAKEOVERS : Acquisition of the target company
through negotiations between existing promoters and
prospective promoters. Resortment of common objectives of
both theparties.

11.  HOSTILE TAKEOVERS : Thesecantakeplaceunderthree
conditions – the Board rejects the offer, the bidder continues to pursue it
or the bidder makes the offer without informing the Board beforehand.