Scribd Logo
Upload

Welcome to Scribd!

  • M & A .PPSX

    Uploaded by

    Macqwin Fernandes
    35 views12 pages
    Mergers and acquisitions allow companies to expand their operations more quickly through inorganic growth. A merger combines two companies into one new entity, while an acquisition involves one company purchasing another. There are several types of M&A deals including horizontal, vertical, and conglomerate transactions. Companies pursue M&As to achieve economies of scale, gain market share or revenue, diversify their business, and access new technologies or markets. While M&As impact employees, management, shareholders and competition, they can create value through synergies like cost reductions or access to new customer bases. Recent large M&A deals included Tata Steel's acquisition of Corus for $12 billion to combine a low-cost steel producer with a

    Original Description:

    k

    Original Title

    M & A .ppsx

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Mergers and acquisitions allow companies to expand their operations more quickly through inorganic growth. A merger combines two companies into one new entity, while an acquisition involves one company purchasing another. There are several types of M&A deals including horizontal, vertical, and conglomerate transactions. Companies pursue M&As to achieve economies of scale, gain market share or revenue, diversify their business, and access new technologies or markets. While M&As impact employees, management, shareholders and competition, they can create value through synergies like cost reductions or access to new customer bases. Recent large M&A deals included Tata Steel's acquisition of Corus for $12 billion to combine a low-cost steel producer with a

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppsx, pdf, or txt
    35 views12 pages

    M & A .PPSX

    Uploaded by

    Macqwin Fernandes
    Mergers and acquisitions allow companies to expand their operations more quickly through inorganic growth. A merger combines two companies into one new entity, while an acquisition involves one company purchasing another. There are several types of M&A deals including horizontal, vertical, and conglomerate transactions. Companies pursue M&As to achieve economies of scale, gain market share or revenue, diversify their business, and access new technologies or markets. While M&As impact employees, management, shareholders and competition, they can create value through synergies like cost reductions or access to new customer bases. Recent large M&A deals included Tata Steel's acquisition of Corus for $12 billion to combine a low-cost steel producer with a

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppsx, pdf, or txt
    of 12

    MERGERS AND ACQUISITIONS

    Suhas Rane

    Why M & A ?
    2 Routes of Expansion A. Natural / Organic Growth Own Limitations Un-Natural / In-organic Growth .. Faster Way

    B.

    Merger

    A transaction where two firms agree to integrate their operations because they have resources and capabilities that together may create strong competitive advantage . The term merger refers to a combination of two more companies into a single company and this combination may be either through absorption or consolidation .

    Acquisition

    A transaction where one firm buys another firm with the intent of more effectively using a core competence by making a subsidiary with in its portfolio of business.

    Difference between Merger and Acquisition


    MERGER
    ACQUISITION

    Merging of two in to one. Mutual decision. Expensive than acquisition (due to higher legal cost). Share-holders can increase their net worth.

    Buying one by another. Can be friendly take over or hostile Less expensive than merger. Generally strong buyer acquires poor or sick co. Hence buyers net-worth may decrease. Relatively faster and easier transaction.

    Time consuming and the company has to maintain several legal issues.

    Dilution of ownership.

    The acquirer only controls the ownership.

    Types of M & A :
    Horizontal Merger
    Vertical Merger Conglomeration

    Product Extension
    Market Extension

    Reasons For M & A :


    Economy of scale.
    Revenue or Market. Economy of scope.

    Cross Selling.
    Empire Building.

    Reason for M & A

    Increased market power Overcome barriers to entry Lower cost and risk of new product development Increased speed to market Diversification Reshaping competitive scope

    IMPACTS OF MERGER AND ACQUISITION

    EMPLOYEES MANAGEMENT

    SHAREHOLDERS
    COMPETITION

    Recent Top-10 M & A s of Indian Cos. worldwide:

    Acquirer Tata Steel Hindalco Videocon Dr. Reddys Suzlon HPCL Ranbaxy Tata Steel Videocon VSNL

    Target Co. Corus Novelis Daewoo Elec. Betapharm Hansen Group Kenya Petroleum Terapia SA Natsteel Thomson SA Teleglobe

    Country UK Canada Korea Germany Belgium Kenya Romania Singapore France Canada

    Deal value ($ ml) 12,000 5,982 729 597 565 500 324 293 290 239

    Industry Steel Steel Electronics Pharm Energy Oil and Gas Pharm Steel Electronics Telecom

    Corus Acquisition by Tata Steel

    There were a lot of apparent synergies between Tata Steel which was a low cost steel producer in fast developing region of the world and Corus which was a high value product manufacturer in the region of the world demanding value products. Some of the prominent synergies that could arise from the deal were as follows : Tata was one of the lowest cost steel producers in the world and had self sufficiency in raw material. Corus was fighting to keep its productions costs under control and was on the look out for sources of iron ore. Tata had a strong retail and distribution network in India and SE Asia. This would give the European manufacturer a in-road into the emerging Asian markets. Tata was a major supplier to the Indian auto industry and the demand for value added steel products was growing in this market. Hence there would be a powerful combination of high quality developed and low cost high growth markets There would be technology transfer and cross-fertilization of R&D

    ICICI BANK AND RAJASTHAN BANK (19 MAY 2010)

    ADVANTAGES This amalgamation would substantially enhance ICICI Banks branch network (23 % approx increase). Strengthen ICICI banks presence in northern and western India. ICICI has now moved to a branch-led business model. The acquisition will help ICICI to increase CASA (current and saving account) flows, as also helps in cross selling products. Both banks working on the same platform, integration will also be less taxing.

    You might also like