Mergers and acquisitions allow companies to combine operations in order to gain competitive advantages. A merger combines two companies as equals, while an acquisition involves one company purchasing another. There are benefits like increased market share and economies of scale, but also risks such as cultural clashes. Some of the largest M&A deals in India include Tata Steel's acquisition of Corus for $12.2 billion, Vodafone's purchase of Hutchison Essar for $11.1 billion, and Ranbaxy's acquisition by Daiichi Sankyo for $4.5 billion. Proper communication, transparency, and managing cultural integration are important to prevent mergers and acquisitions from failing.

1. Mergers and
acquisitions

2. MEMBERS
KHALID JASNAIK
FAIZ KAZI
RAMEEZ KADRI
SAIMA KHAN
MEHNAAZ ANSARI
FAIZAN KHAN

3. MEANING
Merger
•A transaction where two firms agree to integrate their
operations on a relatively co-equal basis because they have
resources and capabilities that together may create a
stronger competitive advantage.
•The combining of two or more companies, generally by
offering the stockholders of one company securities in the
acquiring company in exchange for the surrender of their
stock
•Example: Company A+ Company B= Company C.

4. ACQUISITION
A transaction where one firms buys another firm with
the intent of more effectively using a core competence
by making the acquired firm a subsidiary within its
portfolio of business
It also known as a takeover or a buyout
It is the buying of one company by another.
In acquisition two companies are combine together to
form a new company altogether.
Example: Company A+ Company B= Company A.

5. MERGER ACQUISITION
DIFFERENCE BETWEEN MERGER AND
ACQUISITION:
i. Merging of two organization in
to one.
ii. It is the mutual decision.
iii. Merger is expensive than
acquisition(higher legal cost).
iv. Through merger shareholders
can increase their net worth.
v. It is time consuming and the
company has to maintain so
much legal issues.
vi. Dilution of ownership occurs
in merger.
i. Buying one organization by
another.
ii. It can be friendly takeover or
hostile takeover.
iii. Acquisition is less expensive
than merger.
iv. Buyers cannot raise their
enough capital.
v. It is faster and easier
transaction.
vi. The acquirer does not
experience the dilution of
ownership.

6. WHY IS IMPORTANT PROBLEM WITH MERGER
MERGER:WHY & WHY NOT
i. Increase Market Share.
ii. Economies of scale
iii. Profit for Research and
development.
iv. Benefits on account of
tax shields like carried
forward losses or
unclaimed depreciation.
v. Reduction of
competition.
i. Clash of corporate cultures
ii. Increased business complexity
iii. Employees may be resistant to
change
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7. WHY IS IMPORTANT PROBLEM WITH ACUIQISITION
ACQUISITION:WHY & WHY NOT
i. Increased market
share.
ii. Increased speed to
market
iii. Lower risk comparing
to develop new
products.
iv. Increased
diversification
v. Avoid excessive
competition
i. Inadequate
valuation of target.
ii. Inability to achieve
synergy.
iii. Finance by taking
huge debt.
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8. REASONS /ADVANTAGES
 Size and Synergy
 Increased revenue/Increased Market Share
 Economies of Scale
 Helps to face competition
 Revival of sick units
 Faster growth rate
 Taxes Advantages
 Finance related advantages
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9.  Horizontal Merger
 Conglomeration merger
 Vertical Merger
 Product-Extension Merger
 Market-Extension Merger
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10. TOP 5
M&A DEALS…

11. 1. Tata Steel-Corus: $12.2 billion
January 30, 2007
Largest Indian take-over
After the deal TATA’S
became the 5th
largest
STEEL co.
100 % stake in CORUS
paying Rs 428/- per share
Image: B Mutharaman, Tata Steel MD; Ratan
Tata, Tata chairman; J Leng, Corus chair;
and P Varin, Corus CEO.

12. 2. Vodafone-Hutchison Essar:
$11.1 billion
TELECOM sector
11th
February 2007
2nd
largest takeover
deal
67 % stake holding
in hutch
Image: The then CEO of Vodafone
Arun Sarin visits Hutchison
Telecommunications head office in
Mumbai.

13. 3. Ranbaxy-Daiichi Sankyo: $4.5 b
Pharmaceuticals sector
June 2008
Acquisition deal
largest-ever deal in the
Indian pharma industry
Daiichi Sankyo acquired
the majority stake of
more than 50 % in
Ranbaxy for Rs 15,000
crore
15th
biggest drugmakerImage: Malvinder Singh (left), ex-CEO
of Ranbaxy, and Takashi Shoda,
president and CEO of Daiichi Sankyo.

14. 4. Tata Motors-Jaguar Land
Rover: $2.3 billion
March 2008 (just a
year after acquiring
Corus)
Automobile sector
Acquisition deal
Gave tuff competition to
M&M after signing the
deal with ford
Image: A Union flag flies behind a
Jaguar car emblem outside a
dealership in Manchester, England.

15. 5. RIL-RPL merger: $1.68 billion
March 2009
Merger deal
amalgamation of its
subsidiary Reliance
Petroleum with the
parent company
Reliance industries
ltd.
Rs 8,500 crore
RIL-RPL merger
swap ratio was at
16:1
Image: Reliance Industries'
chairman Mukesh Ambani.

16. Why India?
Dynamic government policies
Corporate investments in industry
Economic stability
“Ready to experiment” attitude of
Indian industrialists

17. Deals in India for first financial
quarter 2010
Sector No. of Deals
Value in USD
million
Share in per
cent
Telecom 3 22732.26 67.19
Pharmaceutical 4 3958.29 11.02
BFSI 6 2651.54 7.84
Metal and Mining 4 1483.15 4.38
Energy 4 1320 3.90
Other sectors 39 1919.00 5.67

18. PROCESS OF MERGER & ACQUISITION IN INDIA:
The process of merger and acquisition has the following steps:
i.Approval of Board of Directors
ii.Information to the stock exchange
iii.Application in the High Court
iv.Shareholders and Creditors meetings
v.Sanction by the High Court
vi.Filing of the court order
vii.Transfer of assets or liabilities
viii.Payment by cash and securities
Maximum Waiting period:210 days from the filing of notice(or the order of
the commission - whichever earlier).

19.
Impact of Mergers and Acquisitions

21. Why Mergers and Acquisitions Fail?
Cultural Difference
Flawed Intention
No guiding principles
No ground rules
No detailed investigating
Poor stake holder outreach

22. How to Prevent the Failure
Continuous communication – employees,
stakeholders, customers, suppliers and
government leaders.
Transparency in managers operations
Capacity to meet new culture higher
management professionals must be ready to
greet a new or modified culture.
Talent management by the management

23. MERGER & ACQUISITION(2009-10) :
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