Well come

Education is not preparation for life;

Education is life itself
TOPIC: Merger & Acquisition , and its types

WASIM KHAN
R.NO 823
SEMESTER 8th

 GOVT COLLEGE OF MANAGEMENT SCIENCE

THANA:
 MERGERS AND ACQUISITION

Mergers and acquisition are defined as consolidation

of companies.
 MERGER
 Mergers is the combination of two campanies to form one
new company.
 The combination of the two companies involves a transfer of
ownerships.
 Both companies surrender their stocks and issue new stock as
anew company.
 WAYS OF MERGER
A merger can take place in following ways:

 Buy purchasing of assets.

 Buy purchasing common share.
 Buy exchanging shares for shares.
 Buy exchanging shares for shares.
 TYPES OF MERGER
1) Horizontal mergers.
2) Vertical merger.
3) Conglomerate merger.
4) Concentric merger.
 Horizontal mergers
 A merger occurring between companies in the
same industry.
 For example:
Pepsi + coca cola= PepsiCo
 Vertical merger:
When two companies produce same goods and services for one
specific product.
For example:
Ebay + paypal= ebay
 paypal
 Conglomerate merger
• A merger between firm involve in totally
unrelated business activity.
• For example:

• DISNIP + abc = disnip* abc

• international television
 Concentric merger.
• The merger of which are into similar type of
business.
• For example:
• CItI + TRAVELER = Citigroup
 ACQUISITION:
 When one company takeover another and clearly
established itself as a new owner , the purchase is
called an acquisition.
TYPES OF ACQUISITION:
1) Friendly acquisition.
2) Reverse acquisition.
3) Black flip acquisition.
4) Hostile acquisition.
 Friendly acquisition.
 Both the companies approve the acquisition
under friendly terms.
For example:
Jonson&jonson crucell
Medical companies biotechnology


(1.75 billion euro’s)

 Reverse acquisition.
 A private company takes over a public
company.
For example:
 Black flip acquisition
 The purchasing company become a
subsidiary of the purchased company.
For example:
 Texas air composites continental
Air lines
 Hostile acquisition.
 Here, the entire process is done by force.
For example:
 Tata steel + Corus
 Difference between M & A
Basics merger acquisition
Meaning fusion of two or more when one entity purchase
companies voluntarily the business of other entity.
form a new company

Formation of yes no
New firm

Purpose size of merging size of the acquiring

company is more company is bigger than
or less same acquired company
 Advantages of a merger:
1) Increase market share.
2) Reduce the cost of operation.
3) Avoid replication.
4) Expands business into new geographic
areas.
5) Prevent closure of an unprofitable business.
 Advantages of acquisition:
1) Increase market power.
2) Low risk.
3) Cost reduction.
 Why did the acquisition fail:
1) Incorrect target:
2) High cost:
3) Large debt:
Bundle of thanks