A

DISSERTATION
ON
“GROWTH STRATEGY THROUGH MERGER AND ACQUISITION
A STUDY REFERENCE IN BANKING SECTOR"

Submitted in partial fulfillment of the requirements for the

award of MBA-B/F degree

SUBMITTED TO: SUBMITTED BY:

PROF.PRADEEP Ahmed Tidiane KABA
KUMAR AGGARWAL

(Professor) MBA
Sharda university, Greater Noida Roll No. 200251010
Batch: 2020-2022

SCHOOL OF BUSINESS STUDIES

SHARDA UNIVERSITY, GREATER NOIDA-201306

i
 APRIL,2022

STUDENT DECLARATION

My name is Ahmed Tidiane Kaba, and I am a student of MBA at Sharda University, Greater Noida. I
represent and warrant solemnly certify that the briefing project report titled, "Growth strategy through
merger and acquisition: a study reference in the banking sector. This documentation includes the findings of
original research work conducted by me, and I certify that it has not been submitted in any manner, either
partly or entirely, for the granting of any certificate or degree by this or any unaffiliated institution.

AHMED TIDIANE KABA

200251010

ii
 ACKNOWLEDGEMENT

A research project's successful conclusion is a shining feather in the cap of any researcher. This cannot be
done without the proper guidance and assistance. One must always show gratitude to those who have helped
and guided him.

At the Sharda University, Greater Noida, Professor Pradeep Kumar Aggarwal has been a constant source
of encouragement and support for me. I would like to thank in particular Mr. Mamadou Bobo Balde my
mentor who has always accepted with great pleasure and infinite patience to answer my questions about with
great pleasure and infinite patience, to answer my questions on the orientation of my research and the
methods of data analysis.

I am also indebted to all the other people who granted me appointments and who answered my questions,
thus allowing me to carry out my research work research their testimony was fundamental.

Finally for their help and advice, I’d want to convey my thanks to these well-known individuals who have
helped me along the way. I would not have been capable of completing my research or write this report
without their assistance. 

Place: Gr. Noida Ahmed tidiane Kaba

Signature of the candidate: Roll No.: 200251010

Date:

iii
 PREFACE

Comparative data on banking sector mergers and acquisitions is the specific focus of this paper. The
financial performance of banks amid mergers and acquisitions was evaluated using financial indicators. Data
from Thomson Financial Services' Worldwide M&A database and bank documents from the company's
corporate website were used in the research. Analysis and multiple regression analysis were used to evaluate
financial data in this research. Ratio analysis is the most widely employed method in all corporate decision-
making processes since it has been repeatedly validated. Before the merger, profitability and leverage in the
banking sector seemed to be enough, according to the data. There is no benefit to the bank in merging with
another small or equal-sized bank whatsoever to increase market share, establish an Islamic banking
window, lower expenses and create synergies while also obtaining natural resources efficiently and
unlocking hidden values, therefore merger proposals fail.
The motivation behind my research is a contemporary contribution halfway between strategic, financial and
marketing competence. The objective is to answer the question that brings together these three areas of
expertise. The aim is to understand the reason for external growth and the beneficial effects it could have in
the development of a bank. my research extension will focus on merger/acquisition strategies in the banking
sector.

iv
 TABLE OF CONTENT

Chapter Particulars Page

No.
1 INTRODUCTION 1
1.1 Concept of the research 2
1.2 The introduction of banking to the world 8
2 LITERATURE REVIEW 12
2.1 International Review 13
2.2 National Review 14
3 RESEARCH METHODOLOGY 16
3.1 Research objective 17
3.2 Hypothesis 18
3.3 Types of research 19
3.4 Population and Sample 20
4 DATA ANALYSIS AND INTERPRETATION 21
4.1 Data collection 25
4.2 Analyses and interpretation 28
5 FINDINGS, Suggestions, limitations, & CONLUSION 35
5.1 Suggestions or Recommendations 36
6 REFERENCE 39
6.1 Bibliography 40
6.2 Questionnaire 41
PLAGIARISM REPORT 42

v
Chapter 1 – INTROUCTION
Over the past decade, a growing share of consolidation operations has directly affected the banking and
financial services sector. The literature review reveals two main motivating factors for consolidations in the
banking sector, namely the external factors whose driving role is the environment, such as the international
opening of markets, technological and financial innovations, 3 deregulation and the strengthening of
European integration; and internal factors reflected in the will of leaders to increase their power in the
market, as well as to reach critical size. The new competitive environment has influenced the banks' business
and profitability and forced them to re-examine their strategy. The strategic turnarounds of several banks
were as numerous as sometimes disconcerting. Fluctuations in the recommendations of advisory firms did
little to inform discussions on the strategic options of these banks.
Considering growth, the bank is confronted with two options: either "organic" expansion inside the company
or "external" expansion via various strategic options such as mergers and acquisitions, alliances and
collaborations in the financial sector.
During a globalized world in industry and markets, marked by increased rivalry, businesses all over the
globe are attempting to safeguard themselves against the most serious threat to their survival: the threat of
extinction. Local businesses, who are currently functioning in an environment of rising rivalry, market share
reduction, and frequent and unpredictable changes, are being pushed to sidestep this issue through the
formation of grouping movements. It appears that this component of concentration is a viable solution for
ensuring the protracted viability the fever of mergers and acquisitions grips the world's largest corporations,
including those in the oil, high-tech, pharmaceutical, banking, insurance, and aeronautics industries, among
others. The « world firm » is expanding its operations all over the world. Mergers are produced with the
primary goal of maximizing a company's size, so any company that is serious about expanding should start
making mergers and acquisitions a central part of its growth strategy.

1
1.2-Concept of the research

The definition of the terms "fusion" and "acquisition" is central to the beginning of our research since the
risks of confusion are so great. Indeed, according to most of the writings on merger acquisition, with a few
exceptions, they tend to use these two terms indifferently, yet, from a legal point of view, these two
operations are different. It seems delicate to remain in this confusion. Aware of these differences, we will
devote this section to the distinction between these two main modes of external growth, the presentation of
their types, and the main differences that distinguish them. 
Good M&A is usually what allows a company that doesn't have an advantage in its field to beat its
competitors. This is true in almost every industry, from SMEs all the way to multinationals.
It doesn't matter if you buy a company for its intellectual property, move to a new place, get valuable
physical assets, or get access to new products and service lines. The main goal of an acquisition is to grow.
At a time when growth in the global economy has been sluggish for the best part of a decade, it is little
coincidence that M&A has hit record levels as companies look to any means possible to ensure they keep
growing. An acquisition is when a company (A) known as the "acquirer" buys an interest in a company (B)
called the "target", giving it control. Thus, company (A) now exerts an influence on (B) without being
obliged to own half the capital of B. The latter thus becomes a subsidiary of Company A. We would like to
point out that an acquisition may give way to a merger, and a merger-qualified transaction can ultimately
turn into an acquisition. From a legal point of view, we note that there are other terms for an acquisition.
Thus, in company law, the term "participation" is used when the share of the capital held is between 10 and
15%, while in business law, the acquisition is characterized by control of an undertaking exercised by
holding at least 40% of the voting rights (provided that none of the other partners holds a higher share).

Merger and Acquisition

This project focuses on banking industry mergers and acquisitions. When two businesses come together to
form a new one, that is a merger. As with an acquisition or takeover, the stockholders of both companies
involved in the merger preserve a stake in the corporation in the case of a merger. Contrary to this, an
acquisition results in an unequal ownership balance in the new combined company because one company
purchases the majority of the stock of the second company.

Over the past several years, the type and quality of the work performed in the business have both evolved.
Indian private sector banks are increasingly focusing their efforts on serving the needs of individuals and
small businesses via retail banking.

2
Mergers typically involve the union of two or more financial institutions. Synergies are widely believed to
be generated by a merger. This project explains why banks merge and buy each other, how they work, how
they affect jobs, working conditions, and customers, and what the problems are. It also gives examples of
mergers and acquisitions of banks in India.

However, despite the fact that mergers and acquisitions both have similar economic considerations, the legal
procedures involved in each differ.

A. Mergers: Two or more corporations (in this case, banks) are combined into a single entity known as a
merger or amalgamation. Mergers are subject to both company and merger law.

Acquiring meaningful control and ownership or operations of another firm without any combinations of both
may be described as an acquisition. The National stock Exchange (NSE of India (SEBI) controls
acquisitions.

Mergers and acquisitions are two different things.

When it comes to mergers and acquisitions, there is really no difference. Both have to do with putting
money into buying a bank or company. Only in the acquisition process is there a difference. Share
transactions, asset/liability transfers, and other forms of asset/liability exchanges are used to merge two
banks. Acquisition/takeover: A single company or a group of companies buys most of a company's capital
while keeping the company's unique name.

However, the operational procedure makes a significant distinction in the eyes of the law. While the
Companies Act, 1856, regulates and covers mergers, SEBI's takeover norms govern and cover acquisitions
and takeovers. To ensure a smooth transaction, it is necessary to oversee the procurement process through
the High Court and the Registrar of Companies.

Acquisition is the process of acquiring another business and integrating it into one's own operations. As part
of this, a premium may be paid to acquire a company based on the value of its capital and the circumstances
of the acquisition.

As with acquisitions and mergers, one or more companies acquire the entire or a portion of a rival company.

Mergers typically involve the union of two or more financial institutions. Synergies are widely believed to
be generated by a merger. It is the underlying assumption that the combined bank will generate more value
than the sum of the individual bank's assets. The "2+2 = 5" effect is referred to by economists as a result of
synergy.

3
Operational and financial synergies are realized as a result of the merger.

Mergers and Acquisitions (M&A will take place)

 By receiving funds

 By obtaining common shares

 By swap of stocks for commodities

 Exchanging shares for shares becomes a strategy to do this.

The motivations how conglomerates come or be obtained

Synergy is the supernatural power that authorizes for increased price efficiency in a new
firm to also be achieved through collaboration. Synergy occurs in the form of increased
revenue and efficiency gains.
 REDUCTION OF THE STAFF

losses in accounting, marketing, and other sectors are usual once a merger is finalized.

 But in the other side, economies of scale

In order to save costs and improve their bargaining position, a larger corporation puts a
larger order of diverse commodities.
 GETTING YOUR HANDS ON NEW TECHNOLOGY

Keeping up with technological breakthroughs is fundamental for businesses to succeed. A

bigger corporation might gain a competitive advantage by acquiring a different company
that seems to have distinctive technologies.
 PROGRESS IN MARKET REACH AND AWARENESS AMONG THE INDUSTRY

Marketing and distribution opportunities may be expanded as a result of a merger. Larger

businesses are more likely to be successful in obtaining capital than a smaller one.

4
Mergers of this type

Vertical mergers occur when two or more companies in different stages of production or operation merge.
Costs associated with price comparison, contracting, payment collection, and advertising can all be reduced
by eliminating or at least greatly reducing their occurrence. The efficiency of information flow within an
organization can improve both production and inventory.

a) Market expansion occurs when two firms that provide the similar product in separate markets combine.

b) This occurs when multiple businesses in just the same market collaborate to offer distinct but related
items.

Mergers between large corporations

Conglomerate mergers involve the coming together of companies engaged in completely unrelated or
dissimilar lines of business. These kinds of mergers are carried out by businesses looking to expand their
product offerings. Conglomerate mergers allow companies to control a wide range of activities across
numerous industries, each requiring a unique set of managerial skills in areas such as research, applied
engineering, production, and marketing. External acquisitions and mergers are the most common means of
achieving this level of diversification; internal development rarely yields the same results. Concentric
mergers are another name for this type of merger. These types of mergers are also carried out by companies
that are located in different place in the globe.

a) The acquisition of a second business is a sort of merger that happens when one firm purchases the assets
of another. If the acquisition is done in liquidity or via others forms of duties, a transaction is subject to
taxation.

b) This type of merger is known as a "consolidation merger," and it occurs when two separate companies are
purchased and merged into one. The tax consequences of a merger are the same as those of a buyout.

How And where to Acquire Funds

5
CONSIDERATION BY ASSETS REVERSE MERGER

Consideration-

It is possible for a business to acquire another business using cash, shares, or a mix of the two methods.

By assets-

In a smaller transaction, a business may purchase all the properties of yet another company

Reverse Merger-

In this form of purchase, a transaction that permits a private firm to go publically listed
in a very short time frame.

The Impact of Mergers and Abandonments on Working Conditions and Working

Practices

First and foremost, harmonizing of disparate management systems, systems, and procedures is essential to
guarantee that all personnel are treated equitably in the newly united company. This includes salary levels
and job descriptions, as well as rights and other benefits, as well as job requirements, responsibility
structures, and supervisory lines, which must all be updated to guarantee that all workers are treated
equitably in the newly amalgamated company

Acquisitions and mergers, compensation, and other methods of reward

Current methods in the field appear to be motivated by two opposing goals.

Compensation in the financial sector is influenced by two factors: the need to cut labour costs in a setting of
increased competition and diminishing profitability, as well as the need to recompense and suitably reward
employee performance and dedication in a continuously changing environment.

Mergers and acquisitions, as well as working hours:

6
The application of the consumer products framework by banking institutions is trying to encourage them to
adapt their having opened hours to meet these same needs of the customer, extending hours on at least 24
hours a week and even entering some branch offices on traditionally closed days also including Sundays a
trend that has sparked large trade union emotional responses in a number of countries, particularly in the
United Kingdom. Isn't it self-evident? When a firm merges or acquires another company, management
might opt to work more customer-friendly hours, such as those provided by ICICI Bank, that is open from
8:30 a.m. to 8:00 p.m., seven days a week, for example.

Mergers and acquisitions as sources of stress and demotivation

Employees feel significant levels of worry and stress as a consequence of mergers and acquisitions because
their working environment is flipped upside down, their jobs are jeopardized, and their future professional
prospects and technical competency are put into doubt. Managers should not be shocked that it is simpler for
them to persuade shareholders about the advantages of a merger than that for them to persuade their own
workers about the benefits of a merge

. Acquisitions and mergers, as well as job security

That empirical data reveals that people all across the globe are facing increased insecurity in their
occupations should rightly say to anybody. Firms are restructuring and decreasing more often, and full-time
employment are being phased out in favor of part-time or casual positions, besides being exported more
frequently.

What Are the Impacts of M & A on Consumers?

A greater capacity of banking firms to provide a wider variety of goods and services as a result of new
technology has benefitted those who have the financial resources to take benefit of these possibilities. Past
developments have seen a significant growth in the availability of more easily accessible and inexpensive
credit for individuals who have a steady source of income and a solid credit history, albeit this has often led
in significant debt encumbrance. A new report says that people who use retail services but have low
incomes, bad credit, or unstable social backgrounds are having a hard time getting traditional banking
services in the mainstream financial services sector.

7
1.2-The introduction of banking to the world

Bancus or banque, which means literally "bench," is the Latin name that was used to create the word bank in
the first place. On benches in the market, the Jews, widely considered as the world's first bankers, conducted
their transactions. It is suspected by some scholars that the German word "back" (which literally translates as
"joint brokerage account") was the inspiration for the word "bank."

The Historical Beginnings of Banking

As recorded in historical records, the Babylonians had developed a banking system. The Greek banking
institutions were dominated by the great temples, which were the most powerful of them. The practice of
granting was widespread in ancient Greece and Rome, and it is still practiced. To settle their accounts,
people relied on cheques and draughts.

Manu, the ancient Hindu lawgiver, has penned extensive rules governing credit in his book of laws. He
discusses credit instalments, interest on loans, and commercial papers, among other things.

Despite the fact that the majority of banking business was conducted by private individuals in the early
periods, many countries established themselves in Barcelona in 1941.Bank of Genoa was established in
1407 as well. To meet the needs of the city's merchants, the Bank of Amsterdam was founded in 1609 as a
savings and loan association. On demand, it accepted deposits that could be withdrawn at any time.

Banking in the United Kingdom

It is possible to detect the emergence of modern banking in the UK. back almost four centuries, and the
history of the erstwhile Royal Bank of Scotland Group members shows how the sector has evolved through
time. The London goldsmiths are credited with establishing English banking, which is correct. They
accepted their valuables and funds for safekeeping and issued receipts for their actions. After a period of
time, these notes became payable to the bearer of demand, resulting in a significant increase in their
circulation. Gold smiths, on the other hand, were doomed over the course of time. This led to a rise in
private banking and the creation of the "Banking of England" in 1694, which was the first bank in England.

- Nationalization of financial institutions

8
On July 19, 1969, an act was approved, giving the government control and ownership of 14 of the country's
largest banks. So that the commercial banks would be bound by certain social duties and aims in the
mainstream of economic growth, this was done. On April 5, 1980, six additional commercial banks were
nationalized.

Automation in Banking Industry

In addition, there has been a significant shift in the way that banks operate in recent years. These institutions
are increasingly reliant on technology. Cash dispensers are used by certain banks, which offer 24-hour cash
withdrawal service, immediate account data, and money transfers over computer networks among other
services. Cash dispensers. Growing competition in the banking market needs new techniques of promoting
products and services.

Customers can now do all of their banking from the comfort of their own homes, thanks to a new app.

Banks are introducing cards that can be used at automatic teller machines (ATMs).

In addition, debit and credit cards are accepted.

This has the potential to completely transform the banking industry.

There are 3 major categories of India's organized banking system:

(i) commercial banks,

(ii) regional rural banks, and

(iii) co-operative banks.

As India's ultimate monetary and financial authority established in 1934, Reserve Bank of India is entrusted
with managing its banking sector. For this reason, it is known as that of the "Reserve Bank."

The Indian Banking Sector Faces a Number of Difficulties and Possibilities

Several international players will be more prominent in the Indian financial system within a few years, and
some Indian banks will also become global players in the next few years, according to analysts.
Furthermore, competition is not only on foreign soil, but also on domestic soil. In order to find new markets,
customers, and profits, Indian banks are adopting a global strategy in search of new opportunities. However,
in order to achieve this, the Indian banking industry will have to overcome a number of obstacles. Some of
them are as follows:
9
The key is in the technology

The use of information technology is essential in banking. Foreign banks and the new private-sector banks
have been early adopters of technology, and they have continued to do so even today. Achieving 100 percent
computerization is the goal, even though public sector banks have reached 70 percent computerization
already.

The importance of network building in banks has also received a lot of attention recently. The sharing of
ATMs by banks has become a recent trend in the banking industry, which has been observed most recently.
One area in which India may have a significant amount of "catch up" to do is in the field of education.
Indian banks should make the most of this cutting-edge knowledge that is available in the country.

LIST OF M/A in India

Name of the acquiring bank Bank targeted Year in which

the merger
took place

HDFC Ltd HDFC Bank 2022

Punjab National Bank (PNB) Oriental Bank of 2021
commerce and United
bank of India
Canara Bank Syndicate Bank 2021

Union Bank of India Andhra Bank and

Corporation Bank
Indian Bank Allahabad Bank
Bank of Baroda Dena Bank +Vijaya 2019
Bank
State Bank of India (SBI) Bharatiya Mahila Bank 2017
and its associate Bank
Kotak Mahindra Bank ING Vyasa Bank 2014
Bank of Punjab Centurion Bank 2005

Industrial Development IDBI Bank Ltd. 2004

Bank of India
10
Bank of Baroda South Gujarat Local
Area Bank
Oriental Bank of Commerce Global Trust Bank
Punjab National Bank Nedungadi Bank Ltd. 2003
ICICI Bank ICICI Ltd. 2002
Bank of Baroda Banaras State Bank
Ltd.
ICICI Bank Bank of Madura 2001
HDFC Bank Ltd. Times Bank Ltd. 2000
Bank of Baroda Bareilly Co-op Ltd. 1999
Union Bank of India Sikkim Bank Ltd.
Oriental Bank of Commerce Bari Doab Bank Ltd. 1997
Oriental Bank of Commerce Punjab Co-op Ltd. 1996

State Bank of India Kashinath State Bank 1995

Bank of India Bank of Karad Ltd. 1994

Punjab National Bank New Bank of India 1993

11
Chapter 2 - REVIEW OF LITERATURE
On the effect of bank mergers and acquisitions in India, several research studies have been done and
published. These papers have analysed the pre- and post-merger situations of selected banks, as well as the
advantages or disadvantages of bank mergers and acquisitions. Here are a few reviews that are linked to that
same topic.

2.1- International review

1. Mergers, acquisitions - Strategy, finance, management Olivier Meier and Guillaume Schier
ISBN 978-2-10-052524-9(2019)
Mergers and acquisitions concern large groups as well as small and medium-sized enterprises facing growth
or succession problems. However, despite their role in the economy, M&A operations show disappointing
results in almost 50% of cases. What is the underlying economic logic behind mergers and acquisitions? To
what extent can their performance be evaluated and measured? What actions can be taken to improve its
profitability? These questions lead to an analysis of the challenges and risks inherent in the different phases
of the external growth process.
This new edition, updated and enriched, develops the steps of a merger-acquisition operation, from the
preparation phase to the operational implementation. Mergers & Acquisitions sheds light on the success and
failure factors of such maneuvers. Many examples and diagrams illustrate the themes covered. At the end of
the book, questions of reflection accompany three in-depth case studies. A very good book, both
professional and accessible, with a good balance between theory (synergies, market power, asymmetry of
information, agency costs...), technicality (legal forms, financial arrangements, method of evaluation...) and
practice (case studies, examples, illustrations), in a pleasant and understandable style. A well-written and
beautiful work that goes to the heart, with precision and clarity.

2-Mergers, acquisitions, alliances in the financial sector In Banking and Insurance Strategy (2014)
“Éric Lamarque”
As this book demonstrates, external expansion necessitates acquisitions from other institutions in order to
incorporate a new activity into the portfolio or to strengthen an existing activity. In the second scenario, we
frequently witness a merging of the two structures, which results in the formation of a single business line or
corporation. A fresh interest in alliances is being sparked in the financial sector as a result of the more
restrictive financial resources accessible to institutions today. This is also true in other industrial sectors. It is
not necessary for an alliance to spend as much money since it prefers to enter into agreements with partners
who will assume responsibility for activities in the portfolio that are not well-developed or do not have
sufficient resources working on them. Historically, in the financial sector, external growth has always been
the chosen method of implementing development goals [...]
12
3. “Mergers and Acquisitions Strategy for Consolidations: Roll Up, Roll Out and Innovate for
Superior Growth and Returns (1st edition) 2020”

Globalization, technical developments, and major policy shifts have led to a new normal: industry
restructuring. Mergers and acquisitions are at an all-time high, making it difficult even for the most seasoned
professionals to keep up. How do you tell if the approach you're taking is the right one when so much is on
the line? Aside from that, how do you know if it'll be useful to you in the future?
The Mergers and Acquisitions Strategy for Consolidations looks at one technique that has had great long-
term success but is rarely addressed by business leaders today. For the past 20 years, Trader Publishing, a
business that expanded to $1.3 billion in yearly revenue and paid its investors over $1 billion in dividends,
has been sharing the secrets of its success in this pioneering book. Three components make to the strategy:
In order to establish a competitive mass and acquire economies of scale in order to drive profits while
enhancing operational, promotion, and centralised administrative efficiency, a rollup is the purchase of
comparable firms servicing a certain market.
Expansion of a company model into new geographic regions or market segments in order to take use of
existing infrastructure and achieve greater economies of scale.
New procedures and creative goods or services help a company maintain relationships with existing
consumers while also attracting new ones, which is essential for long-term success in times of rapid change.
Using Hoffmann's technique, you may build a solid basis for post-deal integration, realising synergistic
advantages, and capitalising on new chances that are typically neglected. This is where the big
moneymaking opportunities are found.
Consolidation strategy is outlined in detail in the Mergers and Acquisitions Strategy for Consolidations.

13
2.2-National Review

1- “Dr. Sangita Ghosh (2016) researched on merger between Global Trust Bank and Oriental Bank of
Commerce.”
In her study of Oriental Bank of Commerce, she looked at the factors of liquidity, efficiency, profitability,
and performance, among other things. It was discovered that, as a result of the merger, the efficiency and
efficiency of the acquiring bank increased, and as such the liquidity situation of the Oriental Bank of
Commerce remained unchanged.
The 21 chapters of this 5th edition describe in a lively style the sequence of the different stages of an
acquisition merger (Mergers & Acquisitions) operation from a theoretical and practical point of view, with
the constant concern for educational clarity and the use of recent examples of financial transactions. This
new edition integrates the strategic and financial dynamics of a merger, the evaluation methods, the role of
the consultants and the project team, the importance of due diligence, the negotiation techniques, the main
financial engineering packages (acquisition, contribution of securities or assets, alliances, public offerings,
LBO...), the latest regulatory and accounting developments, a new case inspired by a recent transaction. In
each chapter, a selection of keywords, supplemented by a summary, bibliographical references, questions
and useful internet addresses, make it possible, with the index, to make this work a real working instrument.
This book is aimed at students in finance, management and accounting, as well as M&A professionals in
investment funds, banks and companies.
2. Kannan R. (2008) in this paper
“The influence of mergers and acquisition on personal banking sectors on worldwide economy” has
explored that Mergers and Acquisition are a very vital market entrance strategy furthermore as growth
strategy. This gift age is viewed as competitive, goes for merging, and enjoys normally monopoly.
alleviation and technological developments area unit more and more forcing the banking industry towards
bigger globalization to increase the agility and flexibility of banks, that is important during the competitive
environment that bank’s function in. the government concurrently seeks to recapitalize weak banks. The
recapitalization of weak banks has not generated the anticipated ends up in the past and hence need to be
linked to a viable and time sure restructuring arrange. The process of merger and acquisition is adopted in
various banks in Asian country like- Times bank joined with HDFC Bank, Bank of Madura with ICICI
bank, etc. Using a simple statistical test called a 'T-Test,' he was able to determine whether or not his
hypotheses had been accepted or rejected by conducting a study that tracked changes in the profit and
money position of something like the largest banks. The investigator discovered that, in general, mergers
will have little effect on banks' financial positions, except when financially weak and non-viable institutions
are combined with a financially solid and profit-generating bank.
14
3. Egl Duksait and Dara Tamosiunien (2009)
Outlined the most prevalent motivations for company’s choice to engage in mergers and acquisitions deals.
The rationale is expansion, synergy, access to intangible assets, diversification, horizontal and vertical
integration and etc. stems from the core company’s purpose to develop. Most of the incentives for
acquisitions and mergers include act as ways of altering comparative benefit within their respective sectors.
This suggests that certain of the reasons for mergers and acquisitions may be more prevalent in some
businesses than others, which would explain why some industries are projected to see an increase in the
number of such transactions. They contribute to capital liquidity, capital fluidity, and control. This manual
examines the implementation of M&A transactions by companies and the financial industry from a technical
and financial standpoint.is divided into four sections: the first defines the overall framework of M&A by
taking a corporate perspective and attempting to explain why, how, and under what conditions external
growth operates as a value creation strategy; the second exposes the operation’s execution from beginning to
end, distinguishing control takeovers of publicly traded companies from non-publicly traded companies. The
third chapter describes the tools used by both the parties involved and their advisers, specifically financial
analysis and evaluation, as well as impact assessments; the final chapter describes the actual arrangements
for taking control. These include possible arrangements for acquiring control and financing M & A, in
particular the use of structured acquisition finance.
 
 

15
Chapter 3 -RESEARCH METHODOLOGY

Data for this project was gathered from secondary sources, such as the RBI's website and the
websites of other financial institutions. The data obtained are of two eras i.e., income
statement of banks during merger. Comparing the financial standing of the combined banks
sometimes during consolidation and determining the effect on their newly formed
organization are the primary goals of analyzing the gathered information.
Indeed, in general, the work rarely highlights the real causes of failure. The studies merely develop the
hypothesis that certain types of external growth operations are more conducive than others to the skills
transfer process, without actually analyzing the process itself. From then on, many reflections by journalists,
professionals, or academics have been conducted and have given rise to numerous articles and books that
shed light on the problems inherent in merger acquisition and examine the issue of the performance of
merger acquisition from different angles. For the majority of executives, the financial approach is a major
determinant in merger and acquisition operations in a stock market-driven economy. Moreover, for
researchers of the financial approach, the performance of the Fusion Acquisition corresponds to the creation
of "shareholder" value, that is to say, the maximization of the wealth of the firm’s owners, namely its
shareholders. More specifically, the authors analyzed the impact of the merger acquisition on the market
value of the acquiring company and that of the acquired firm based on measures known as stock-market-
based measures. The results of their research have made two important points clear: First, the shareholders
of the target banks will get more money at the expense of the shareholders of the acquiring company.
Second, the question of the gain for the shareholders of the acquiring company is looked at: this gain can be
positive or negative.

16
3.1-Objectives of the Research
The purpose of this research is to understand, restore and conceptualize the concept of perceived
performance within a specific framework: that of the perceived failure and success of a Merger Acquisition
transaction in the banking sector, in order to detect a determining factor of these positive or negative results.
I therefore have the ambition, through this subject, to respond to the lack of empirical study, which seems to
be present on the literal plane, by offering a description of the performance in the sector of bank mergers and
acquisitions, so many times emphasized in the previous work, and yet presented through several dimensions
to understand the success or, conversely, the failure of a Fusion Acquisition operation. The study of multiple
cases conducted in depth, throughout our thesis, constitutes, from our point of view, a first contribution.
Also, the theoretical contribution of this research is the identification of conceptual links among various
themes in the literature, in order to develop and examine the strategic decisions of leaders, as part of the
conduct of a bank reconciliation process.

 The grounds of Acquisitions and Mergers of Indian banks and

 Also, to discover the consequences of Merger or Acquisition of banks.

 Prior to the actual merger, we examined at how public sector banks performed as a whole.

 To analyses the overall functioning of public sector banks before and after the merger.

 To compare the overall performance of merged public sector banks and private banks in order.

 to evaluate the efficacy of a merger.

As a way of comparing the current effectiveness of merging public and private sector banks,
estimate of a merger's success

3.1-Hypothesis:
H0 statement: Indian banking acquisitions are a viable large-impact strategy, with significant benefits
accruing to bidders in a merger or acquisition deal.
H1 statement: There is no statistically significant difference between ICICI Bank's pre-merger and post-
merger financial performance, but there is a statistically significant difference between ICICI Bank's pre-
merger and post-merger financial performance. Aspects of the
Survey Idea:

17
Exploratory, descriptive, and causal designs are the three categories of study designs. I employed a
descriptive methodological approach for my project.

SOURCES OF DATA:
There really are two types of data collection: two sources of data. I have utilized secondary information
for merger or acquisition in banking industry.

3.3-POPULATION:

All transactions (M&A) agreements completed in the Indian banking industry

SAMPLE SIZE: No of sample taken for study is 3.

1. Acquisition of ICICI bank and Bank of Rajasthan

2. Merger of Kotak Mahindra bank and ING VYSYA bank.
3. Merger of GTB with Oriental Bank of Commerce.

SAMPLING DESIGN:

There are two kinds of sample design: random and controlled. The use of a systematic sampling approach
and a non-probability data collecting procedure are both recommended. I adopted a basic random sample
design in my analysis.

18
 Chapter 4 - DATA REPRESENTATION AND ANALYSIS:

Introduction of the Merger Case:

4.1- The Bank of Rajasthan was taken by ICICI Bank (Year of Merger:
2009-10)

 Financial entity that is not public sector On May 18, 2010, Currently the second private sector
lender, ICICI Bank, agreed to buy Bank of Rajasthan for $296 million in market value. This is the
first merger of India's packed banking industry since 2008, when ICICI bank purchased Bank of
Rajasthan. It has been agreed by both committees for ICICI Bank and Bank of Rajasthan (BoR) to
combine in an all-share merger valued at over 30 billion rupees.

 In an all-share acquisition, ICICI offered Bank of Rajasthan 188.42 rupees per share, representing an
89 percent premium to the tiny lender's closing price the previous day and valuing the firm at $668
million. ICICI gave the controlling shareholders of the smaller banks 25 shares in ICICI in
compensation for 118 shareholders of Bank of Rajasthan

 The Big Acquisition: The transaction values the minor bank at about 2.9 times the book value,
compared to an average of 1.84 within the Indian banking industry, and would offer ICICI a strong
presence in Rajasthan, a desert state in the northwest. With a loan book of 77.81 crore ($1.7
billion), Bank of Rajasthan maintains a system of 463 branches

Announcement of a merger, movement in the stock price, and changes in the

shareholding pattern:
 
Companies' histories are enriched by acquisitions and mergers. It is important to note that merging news
have a substantial influence on both the bid and the target banks' stock values. It has been proven time and
time again that bidder bank shareholders have shifted their money to that of target process by which
companies and vice versa in the global arena. Since the beginning of merger discussions on May 7th, 2010,
BoR's stockholders have gained about 90% between that date and May 23rd, 2010. (Board Meeting
approval)

19
The data on the stock price of Ajdabiya has been separated into three periods for the sake of study, namely
respectively.

Period I pertain to the period commencing on 26/02/ 2010 (the day when the RBI imposed the penalty) and
concluding on 6/05/2010. (A week before merger discussions began). It was 61.8 on February 26th, even
though it was 84.7 on May 6th, because when closing price of BoR's scrip was attained. This was the time
period during which the bank was subjected to major regulatory action. During this time, the bank's scrip
value climbed by 20.9 %, compared to a 9.9 means of income on the Bank Nifty index. On March 8 (the day
following the SEBI suspension) and March 9 (in the week after the RBI's special audit order), the price of
BoR was 66.85 and 62.5, respectively.
Period II shows the time interval from 6/05/2010, to 17/05/2010, inclusive (phase of merger discussions)
(period of merger negotiations). On May 6th, the equity of Bank of Rajasthan traded at 84.7, while the stock
of ICICI Bank traded at 902.85. Price records for the day were maintained by ICICI Bank and Bank of
Rajasthan, who recorded prices of 901.1 and 82.25, respectively. It implies that perhaps the price for

20
merging enterprises is not changed by the talk of a merger. The Bank Nifty earned 2.7 percent throughout
the forecast timeline.

Period III encompasses the period of time following the launch of the merger, i.e., from 18/05 to 24/06/
2010. The BSE single source of information of the transaction on June 24th, when BoR submitted the
appropriate paperwork. On the 16th of May, the price of BoR is 82.85. Following the launch of the merger,
it jumped substantially, hitting 99.45, 119.35, 131.30, 144.45, 158.9, and 162.03 on the 17, 18, 19, 20, 21,
and 24, then, and has stayed there ever since. ICICI, on the other side, saw its share price decline from
901.10 to 809.35. During this time span, BoR's value increased by almost 77%, whilst ICICI's value
decreased by 1.7 percent. A notable development during this time period was a 4.6 percent decrease in the
Bank Nifty index of Indian stocks. According to the valuation and fixing of the swap ratio, the BoR's short-
term wealth creation can be understood as follows: Both banks agreed on an indicative price of 188 per
share, which was used as a starting point. Taking this research into consideration, it can be determined that
prices were not particularly vulnerable throughout the period of negotiation in question. However, following
the announcement, the share price of BoR was almost exactly equal to the amount provided by ICICI.

21
In view of the authorities' "exceptional operations," it is noteworthy to investigate the business model of
BoR during the fourth fiscal quarter of FY 2009 and the first fiscal quarter of FY 2010. Institutional
investors' share climbed from 5.73 percent to approximately 3.2 percent among both March 31 and June 30,
2010, with FIIs accounting for an increase of 2.34 percent to 8.95 cents on the dollar. Body corporate and
individual investors' stakes both declined dramatically. An example of information imbalance and influence
peddling may be found here

Valuation and Adequacy of Swap Ratio

The valuation phase of few mergers and acquisitions activities are crucial, and it is dependent to the talks
that take place where both the buyers and sellers. In the eyes of the investors of the companies involved in
the merger process, it is extremely essential, nevertheless that is more of a proportional rather than just the
absolute value of anything. A multistep technique is involved, and failure is not an option. at any point will
risk the entire transaction. The merger of the Federal Bank and the “Catholic Syrian Bank”, which also was
postponed in September 2009 owing to valuation differences, is an example of this. From a financial aspect,
the process of valuing a merger is comprehensive, and it is done in order to calculate the majority of the
following expression:

Exchange Ratio (Swap Ratio) = Company A Share Value

Company B share Value

22
The deal looks to have been costly for ICICI, as seen by the 88.5/share premium paid. The question is
whether or not this premium is reasonable in light of the circumstances.

Table 2: Relative contribution Analysis

The above table clearly indicates that the average contribution of BoR in the combined entity in terms of
various size variables is 7.4% which is higher than the actual shareholding of BOR in the combined entity
(3%). So, on the basis of contribution analysis, it can be argued that BoR got undervalued. But it is to be
remembered that profitability aspect is not considered in that analysis as BoR reported a net loss of 1021
million rupees in the financial year prior to the merger. Based on financial metrics such as net profit, EPS,
and book value, ICICI Bank's valuation should've been more favorable. ICICI Bank lost money as a result of
the transaction. Financially, BoR is significantly behind ICICI Bank, which has a similar acquisition
strategy. In Tamil Tamilnadu and Maharashtra, they expanded its geographic reach by merging with Banco
of Madura and Sangli Bank. Bank of Madura had 182 branches in Tamil Nadu, whereas Sangli Bank had
158 branches, all of which were in Maharashtra. Because ICICI Bank wanted to purchase a bank with a
significant foothold in northern India, the sale of BoR is clear evidence of this. To a large extent, the swap
ratio was fixed due to the BoR's large CASA deposits, which account for around 40% of total deposits. As a
result, it may be stated that the valuation is reasonable and that a favorable rate of exchange for BoR (based
on market pricing) was represented in the stock market.

23
Pre-and Post-Merger Performance measurement through profitability

Net profit Margin Return on Assets Return on Equity

Pre-Merger
2007-2008 31.1 1.1 13.4
2008-09 41.58 1.1 11.1
2009-10 37.58 1 7.7
Total [A] 110.26 3.2 32.2
Post-Merger
2010-11 40.25 1.1 7.9
2011-12 51.51 1.34 9.58
2012-13 64.65 1.5 11.09
2013-14 83.25 1.66 12.94
2014-15 98.1 1.76 13.73
2015-16 111.75 1.86 14.3
2016-2017 97.26 1.49 11.32
2017-18 18.09 0.77 6.63
2018-19 5.3 0.34 3.19
2019-20 10.6 0.72 6.99
2020-21 20.46 1.31 11.21
Total [B] 601.22 13.85 108.88
Grand Total [A+B] 711.48 17.05 141.08

Interpretation:

The strongest pre-merger performance in terms of profitability was recorded in the year 2007-08, while the
lowest performance in terms of return on equity was recorded in the year 2007. during the academic year
2009-10 Further, following the merger, the highest return on equity was obtained in the fiscal year 2014-
10, with a ratio of 13.73:1. In contrast, the highest return on equity was achieved in the year 2010-11, with
a 7.90:1 ratio. To be done to ensure that the post-merger financial performance of net profit in ICICI Bank
Ltd is as good as or better than the pre-merger bank profitability of profitability ratios

24
 Pre- and Post-Merger Performance through Growth ratios:

Growth Ratios Earnings Per Share Dividend Per Share

(EPS) (DPS)
Pre-merger
2007-08 34.84 10.00
2008-09 39.40 11.00
2009-10 33.80 11.00
Total [A] 108.04 32.00
Post-merger
2010-11 36.10 12.00
2011-12 45.27 14.00
2012-13 56.11 16.50
2013-14 72.20 20.00
2014-15 84.99 23.00
2015-16 19.32 5.00
2016-17 16.75 5.00
2017-18 11.76 1.50
2018-19 6.42 1.00
2019-20 13.72 0.00
2020-21 24.96 2.00
Total [B] 387.60 100.00
Grand Total [A+B] 495.64 132.00

Interpretation:
As per above data. It is possible to infer that the post-merger financial performance of ICICI Ltd. is
comparable to or better than for the pre-merger financial performance of the future growth ratios.

25
4.2- “Merger between Kotak Mahindra Bank and ING Vysya Bank”

 INTRODUCTION OF KOTAK MAHINDRA BANK:

The corporate headquarters of Kotak Mahindra Bank are headquartered in Mumbai, Bombay, India. India's Reserve
Bank of India granted Mahindra Finance Ltd., a banking licence in February 2003.

 Introduction of ING Vysya Bank:

Vysya Bank Limited (Vysya Bank) was established in Bengaluru, Karnataka, in Southern India in 1930
underneath the name Vysya Bank Limited. The ING Group purchased a significant share in Vysya Bank in
2002, resulting in the establishment of ING Vysya. There has never been a foreign bank's takeover of an
Indian bank before this one. ING Vysya provided a wide range of financial services under four business
categories: Treasury, Business / Wholesale Banking, Consumer Banking, and Other Banking Business.
Treasury was one of the company's four business sectors.

On the 20th of November of that year, Vysya and Kotak jointly declared their decision to unite their
organizations. The RBI cleared this transaction on 31/03/2015, and it will go into effect on April 1, 2015.

There has been a pressing need is for Indian banks to develop in the current context of globalization and
increasing overseas banks. India's fourth largest bank, ING Vysya Bank Limited, was acquired by Kotak
Mahindra Bank Limited in late 2014, which was arranged as an all-stock merger, in order to create a single
amalgamated business.

 THE PARTIES:

. KMB Financial Services Pvt. Ltd. is a financial services company based in India. Kotak Mahindra Finance
Capital Management Limited is a financial services business that is not affiliated with a bank. It was
established in 1985 and initially focused on financing the purchase of automobiles. It was the first non-bank
financial groups (NBFC) to be transformed into a bank, which occurred in 2003.

"Vysya Banking," a part of the ING Group of Banking Institutions, has been in the banking business since
its foundation in the South Indian trade communities as far back as the 1930s. It is one of the oldest banks in
the country. When the Indian banking behemoth ICICI Bank announced its merger with the Netherlands-
based ING Group in 2002, it created history as the country's first bank to combine with a foreign institution.
A strong presence in the region has been built by the bank, which has approximately 500 branches spread
over southern India. As a result of its links to the Holding Company, it has grown its international reach to
include locations in five countries.

26
 CHRONOLOGY OF EVENTS:

 DETAILS OF THE MERGER:

27
The above chart can be analyzed as below:

 Reported In the financial Ratio: 0.725:

 725 gets to share of Kotak for each and
SWAP RATIO every 1,000shares of ING Vysya
EFFECTIVE DATE On the effective date, once all necessary
permissions have been obtained.:
 Kotak Bank, comprising ING Vysya's
operations and branches, acquires Kotak
issues shares to ING Vysya shareholders
. Following that, all shareholders (including those
of Kotak and ING Vysya) are eligible to partake
in the dividend (merged).
The Kotak Group of Companies
Kotak Mahindra Bank Limited is a private
BANK OF THE TRANSFEREE limited company.

28
TRANSFEROR BANK ING Vysya Bank Limited
THE FORM OF THE TRANSACTION The merger of ING Vysya and Kotak was
completed fully under a single merger process.
Section involved in a wide variety of a BR Act
as well as the Merger Guidelines were followed
in the merger.
BEFORE THE MERGER, They Use To have a Promoter Group: 40%.02 The public owns 59.98
SHAREHOLDING IN KOTAK. percent of the shares.
￭ 36.85 percent of FIIs the annualized rate of
return for UTI Mutual Funds is 1.65%
Banks/Financial Institutions: 0.021 percent.
4.25 percent for non-U.S. banks foreign bodies:
2.04 percent. 3.30 % of all corporations 10.27%
of the population is made up of individuals.
1.41 percent of the population
Prior to the merger, I used to have a share in the 42.51 percent of the group that promotes
business Ing Vysya. 57.49% of the total shares are held by the
general public.
26.98 % of FIIs the UTI/mutual fund ratio is
13.43%. the 1.76 percent of banks and other
financial institutions 5.36 percent of corporate
bodies 8.14 percent of the total • Others: 1.82%;
The Promoter Group: 33.99 percent of the
Wants to share IN KOTAK AFTER THE MERGE population. Sixty-six and one-hundredths of one
percent.
A 6.48 percent share of the ING Group
Percentage of foreign investors (FIIs): 33.58%
20% of the population is domestic. 6.83 percent
of total FDI

29
4.3-“GLOBAL TRUST BANK AND ORIENTAL BANK OF COMMERCE”.

Because of his role in the Ketan Parekh securities scam, in which he provided massive personal loans to a
stock broker including the Zee Telefilms group of firms in 2001, Ramesh Gelli, who is now an entrepreneur,
was the driving force behind the GTB's downfall in 2003. As of 31/03/2002, the GTB's balance sheet
indicated a net value of Rs. 400.4 crore and an income of Rs. 40 crores, according to the company's audited
financial records for the fiscal year that ended on March 31, 2002. Put it another way, the RBI's
investigation has revealed that the bank had a negative capital worth

A chartered accountant was employed to ensure that everyone was on the same page as a result of the
significant disagreement between the financial evaluations of GTB provided by its auditors and the
economic assessments of the RBI's inspectors.

 Oriental Commercial Bank has taken over the recently departed Global Trust Bank.

Supported the introduction of Global Trust Bank in 2008, the Reserve Bank of India (RBI) approved a plan
to merge Global Trust Bank with the Allahabad Bank, which was approved by the RBI. On August 14,
2004, the newly formed corporation was officially recognized. As of this day, the Oriental Bank of
Commerce has gained control of all of the existing Universal Trust Bank Ltd. branches, and the prior Global
Bank Limited Ltd. has been replaced by a new entity.

Expanding the company was the main objective of the merger between Global Trust Bank and the Oriental
Bank of Commerce. Performance review by purchasing bank Oriental Bank reveals a rise in profit
maximization in the post-merger period; nonetheless, the liquidity situation has remained constant.

International Trust Bank and Orient Bank of Commerce's money matrix is illustrated here.

30
From the above table we can analyses that:

 From a technological standpoint, OBC would have gained, since it would have adopted GTB's
forward innovation rather of moving backwards.

 The merger benefited 0BC's ATM network by increasing the number of ATMs from 100 to 235,
Establishing OBC in 3rd position among private banks in terms of ATM network is a significant
accomplishment.

 The merger wasn't without its drawbacks for OBC, which has been burdened by Rs. 915 crores in
gross non-performing assets (GNPAs) in addition to Rs. 300 crores in bad loans from GTB. 2

 This transaction was predicted to reduce OBC's capital adequacy ratio to 13.1 percent out of its
prior 14.47 percent level.

 The merger was thought to have had a detrimental influence on OBC's financial stability, which
seems typically considered as one of the best in the banking industry as a result of the merger

31
 The government's newest merger announcement has as its goal the cleaning up of the cash balance and
the reduction of non-performing assets (NPAs).

 The government's goal is to merge one weak bank with all its stronger counterparts, which seems
known as the Compatriots strategy

 Dena Bank, which is situated in Mumbai, is the weaker of the two banks in this instance.

Significance

 For about the first time, he is seeing a combination of three public sector bodies, which may serve as a
model for future mergers of this nature.

 One Prompt Corrective Action (PCA) bank and two strong banks are among the three banks engaged
in this case (Dena Bank).

 It is understood as an attempt to revitalize a somewhat weaker bank by combining it with two more
robust banks.

 While two banks are practically next to one another, the third bank, which is headquartered inside this
south, becomes strategically crucial because of its location.

 The merger takes place at a time because all banks are struggling to stay afloat on the verge of negative
returns.

 According to analysts, the outcome of this merging is critical to the successful implementation of
future merger undertakings.

Positives

 When two banks join, the combined capital will be higher, giving the appearance of a stronger bank.

 financial institutions with even more lending ability

 It will allow the banks to operate efficiently while also contributing to the improvement of corporate
governance.

 It will allow the banks to generate more revenue all the while maximizing the efficiency of financial
32
regulation.

 Increased operational efficiency is a positive thing.

 It is believed that the cost of capital for the combined firm would lower.

 Current Account and Time Deposits (CASA) deposits might be attracted through larger banks.

 Banks will be able to generate money without relying on the state's coffers for their cash flow.

 Improve the ability of the banking sector to endure shocks that may be created by the stock markets.

It would be necessary to merge.

 PSBs are highly scattered compared to major economies.

 Following the example of SBI, the merging will let the government would give greater beneficial
attention to the bigger institution that always come from the merger.

 To safeguard the financial system and the money of the depositors.

 To increase the capacity in order to fulfil credit demand and keep economic expansion continuing.

 Connecting geographical gaps

 In 1991, the Narasimhan Committee recommended that India ought to have fewer but more powerful
public sector banks.

Suppositions / Constraints

 The integration of these corporations' technology platforms and cultures.

 Managing the allocation of bank employees and the human resources management inside the newly
merged institution

 Maintaining harmony in a public sector setting would be difficult due to the structure and significance
of seniority concerns in the company.

 Unification and simplification of current facilities provided

 A significant Net NPA and a negative Return on Assets brought Dena Bank under the immediate
remedial action of the Reserve Bank of India in May 2017 (Return on assets).

 As the leading banks, Bank of Baroda will take a significant hit to its asset quality.

 We have experienced SBI's recent merging with its associate banks as an example of how client
retention is a difficulty.

 Things can't get any better for the banking system overall since the capital is locked.

33
 The quantity of Gross NPA (GNPA) cannot be changed, and it will continue to be a problem that must
be handled.

 Not all PSB mergers are created equal.

Future

 Merging 2 or 3 banking sector may not result in a massive shift in the architecture if the governance
concerns in the institutions are not addressed.

 The results of mergers may not be satisfactory in the long run unless the operating structures of the
companies are changed.

 Providing the PSBs the autonomy while yet holding them accountable

 In addition, for the merged firm to benefit from the merger, it will need government aid in funding the
acquisition.

 If these banks rationalize their branch networks, search for ways to cut expenses, and handle personnel
issues effectively, the merger will provide the expected objectives.

As the Financial Year of the above merger is yet to complete there were no financial reports available and
so only an overview of the same is given in this project.

34
CHAPTER 5 – FINDINGS, Suggestions, limitations, & CONLUSION

(a)-FINDINGS
 There are a variety of factors that have led to the current surge in mergers and
acquisitions, including increased multinational rivalry, regulatory changes, quickly
changing technology, a desire for rapid application development, and capacity
utilization in the sector (M&A).

 In addition to major place big about: the United States, Europe, and Japan, emerging
countries like India also saw an increase in mergers and acquisitions.

 Strategic relevance of large acquisitions comes from the fact that they limit the
opportunity for error and are difficult to reverse.

 activities That contribute, the threats involved go far beyond the realm of financial
loss. Work processes might be affected if a merger goes awry., client trust to be
diminished, the company's reputation to be damaged, employees to be forced to quit,
and staff motivation levels to be low. The old adage, "Discretion is always preferable
to heroism," is true in this case, and is particularly appropriate.

 Prior to entering into a merger and acquisition deal, it is imperative to do a detailed

risk evaluation of the multiple risk’s particular transaction. It is critical to properly
investigate all of the circumstances in which the acquisitions may go wrong,
competent the most horrific possibilities, before going with the transaction.

 To avoid severe consequences, even if a failure is highly unlikely, it is prudent to take

time to consider all options before rushing to close the deal.

35
(b)- LIMITATIONS OF STUDY:

1. Because mergers and acquisitions are so rare, there is not a vast amount of information about them.

2. As a result, we were unable to cover all of the details. As a result, this can prove to be a major issue.

3. Because the data was collected from secondary sources, there was a constraint on how they might be
interpreted.

4. As a result, some of the findings may be based on a single location or aspect of the research.

5. It is difficult to uncover the facts of how and why banks combine and acquire one another since the
process is kept hidden from the general public

6.The info is not up to date because it was obtained from books and other websites.

7-There are a variety of financial terminology that are difficult to understand in the context of M&A.

8. It is difficult to explain the exact effects on customers of financial services merger and acquisition.

36
(c)-CONCLUSION
Mergers and acquisitions are effective or ineffective not because of one or two factors, but because of a
combination of factors. So, while studies may focus on specific variables, they do not rule out the possibility
of other variables being present. Managers have to think about a lot of things that could affect how well a
merger works at different points in the process.
One factor that'd contribute to the success of a merger would be raising the awareness of managers about
these considerations. In addition, it is important to have a good performance management system in place so
that it can measure how well the merger worked in terms of integration, operational, cultural, and financial
measures (Wolf, 2003).
They represent, therefore, one of the essential modes of development of enterprises, both in developing and
mature sectors. The strategic objectives of these operations are therefore multiple and can respond to
offensive (entering a new market, acquiring new resources, etc.) or defensive reasons (consolidate or defend
its positions, seek a critical size, adapt to changes, etc.). I have tried to show that bank growth strategies
have not only advantages but also disadvantages, one can foresee that these operations would cause a strong
monopolization in the banking sector, this would significantly strangle competition. They could also have
adverse effects on small investors who will see their situation deteriorate against a rise in power of
institutional investors in capital. On the social side, it can lead to branch closures, the elimination of some
jobs, and the possible increase in the price of financial services that would have a serious impact on
investment and the economy. Reconciliations operations remain highly dependent on the economic outlook,
such as the rapidly spreading financial crisis, thus triggering a deleveraging cycle, resulting in a contraction
in consumption and investment, which resulted in a sharp drop in the value of MA involving private zone
players in the abandonment of emerging markets in favour of local markets and the search by financial
institutions for stability and high capital, to the detriment of business growth. As a result, the growing trend
will be towards nationalization.
When it comes to assessing success, different streams may have partisan perspectives. However, an
integrative approach is required to ensure the long-term success of a merger. Besides developing success
measures at the end of the process, it is critical to develop success measures at every phase in the preparation
of merging two companies as a result, the merger team would be able to obtain fast information about the
success or failure of something like the transaction. That argument relies on the study's findings., a measure
may be designed and evaluated to aid managers in performing their own evaluations of their own
performance.

37
d)-Suggestions

According to the findings of the study, mergers and acquisitions are not aimed at achieving outcomes for
banks. The causes for this include a combination of domestic and foreign economic variables. Additionally,
their findings from the study are addressed. Prior to pursuing acquisitions and mergers, the bank must
examine its financial position and offer grant and liquidity support to the bank that has suffered the most
from the financial crisis. Adapting rehabilitation programmes under the guidance of the RBI would allow
banks to restore their position by injecting financial support and attracting new investors. Regulations must
consider the impact of economic factors such as the interest rate, inflation, and labour expenses on a bank's
capital adequacy, capital adequacy ratios, and the requirements for an alternative source of funding in order
to conduct an appropriate regulatory control analysis.
Aside from that, banks should complete all necessary papers regarding the management of target banks, as
staff have a significant impact on the profitability of the bank in question. Acquirers must assess the senior
management team that will bring value to the company following the merger or purchase. This research is
only going to last for a brief length of time. After a merger and acquisition, the bank should be provided
with a reasonable time frame to ensure that profitability can be maintained over an extended period of time.
Finally, timing and environmental variables are critical considerations, so banks should pay close attention
to the timing of the transactions, when to combine them, and which problems are now affecting the
worldwide market.
The gleaming new firm may or may not bring with it vast riches, and nothing can guarantee that you will not
be putting your most sensitive information assets at risk as a result of linking your network infrastructures in
there in the first place. It is possible to lessen the probability that an expensive and unpleasant security
breach may occur in any organization by implementing the recommendations under. It should be linked to
your financial due diligence and put into effect as soon as possible.

 Assess the Risk to the Business

 Thoroughly evaluate your liquidity and financial capability.

 Analyze the external perimeters

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 Make sure that the company's security measures are up to date.

 Take a look at the most critical applications

 Put together the perfect team.

 Make sure information can be shared securely and efficiently.

 Learn about the methods used to gather security intelligence and how systems are monitored.

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 BIBLIOGRAPHY
Books: -

1.” Weston, J. Fred, Weaver, Samuel C, 20014, Mergers & Acquisitions, ISBN-10: 0071435379 “

b) Khan M. Y,2015, Financial Services, ISBN-10: 9339221869

c) Boeh, Kevin K.& Beamish, Paul W ,2007, Mergers and acquisitions text and cases

d) Gaplin and Henron, 2005, The Complete Guide to Mergers and Acquisitions, ISBN: 1118827236
e) Suchismita Mishra, Arun J Prakash, Gordon V Karels, and Manferd Peterson (2005). Bank
Mergers and Components of Risk: An Evaluation. Journal of Economics and Finance, Vol. 29,
Is. 1, p. 85-96 (12 pp.)

f) Dewan Astha, 2007, Effect of Merger and acquisitions on operating Performance: A Study of
Acquiring Firms in India.

g) Maravedi Pramod & Reddy Vidyadhar, 2008, Mergers and Operating Performance: Indian
Experience, The Icfai Journal of Mergers & Acquisitions, Vol. 4, No. 4, pp. 52-66

h) Kannan R., 2008, the impact of mergers and acquisition on personal sector banks on international
economy.

i) Duksait, Egl & Tamosiunien, Rima (2009). “Why companies decide to participate in mergers and
acquisition transactions”, MOKSLAS – Laoutos Aeitis, 1 Tomas, nr. 3, science – future of
Lithuania 2009, vol. 1, no 3, pp 21-25.

j) Dr. V. K. Shoshana & Dr. N. Deepa, 2011, International Journal of Research in Commerce,
Economics and Management.

k) Rehana Kouser and Irum Saba, 2011, Effects of business combination on financial performance:
Evidence from Pakistan’s Banking Sector.
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 l) Dr. P. Natarajan and k. Kalaichelvan, 2011, Efficacy of Merger and Acquisition in Indian
Banking Industry.

-NO Appendix

a- Questionnaire

1- What are the strategic, economic and marketing benefits of M&A operations targeted at a bank?
2- banking sector?
3- What are the methods used in practice in a merger and acquisition file to value a banking target?
4- What is your (subjective) view of the motivations of purchasers in bank mergers and acquisitions?
5- How to convert partnerships in and out of practice?
6- To what degree do the limits appear to be a barrier to the effective completion of merger
transactions?
7- How can a merger or acquisition help a company expand?
8- Does a merger and acquisition make sense for your company?

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