SAGARICA BRAHMA (2017PGP103)

Topic: Corporate Restructuring

Role: Representative from AAM
AAM refused to acquire MAAN GO because of several reasons:
o AAM did not want to dissolve its ownership which was where it was headed to,
post-acquisition.
o AAM felt it was capable enough to achieve the sales without the help MAAN
GO’s e-commerce website, wherein, their products will be listed. This would
compel AAM to pay a certain amount as commission during each transaction.
This doesn’t make any sense as they already have a large distribution network
and considerable size of the market share within their forte.
o AAM believes that this is not the correct time to go for any acquisitions because
at the moment, they have several plans lined-up and would prefer to focus on
them
o Among the strategic plans, the primary ones are the renewal of the farm’s
leasing, implementation of the safety standards, registering the trademarks,
clearing some of their alleged fraudulent trade malpractices, resolving payment
issues, income tax issues with respect to GST compliance, and resolving
controversies linked with genetically-modified mangoes
Taking into consideration these concerns as mentioned above, AAM believes that the deal
would lower their valuation. However, if these issues are resolved they are willing to go ahead
with the deal.
AAM was willing to go into a joint venture on the condition that neither of the companies
would retain their individual names after they merge. It proposed that the merged should be
named in a way that it reflects the names of both the firms. MAAN GO did not agree to this,
and hence, the deal closed without any eventual outcome.