Audyogik Shikshan Mandals

Institute of Management & Computer

Studies, Thane.
MMS 2nd Year (Finance)
Sub : - Mergers & Acquisitions

Submitted by :
Shashank Bijagare
Rajesh More

(07)
(34)

What is Merger?
A merger is when you integrate the business with
another and share control of the combined
businesses with other owner. A merger involves the
mutual decision of two companies to combine and
become one entity. i.e. a + b = c

Merger: 2 firms combine all Assets and Liabilities

Acquirer
Target
Usually take a new name

What is Acquisition?
Acquisition may be defined as an act of
acquiring effective control over assets or
management of a company by another
company without any combination of
businesses or companies. i.e. a + b = a

Global Trust Bank

GTB opened its first branch in Secunderabad
Andra-pradesh on October 30,1994
Collected Rs. 100crores of deposits on the
first day of its operations
Promoters Ramesh Gelli, Jayanta Madhab,
Sridhar Subasri
August 14, 2004, GTB was amalgamated
with Oriental Bank of Commerce

Rapid Rise of GTB

Initial Public Issue of RS 1040mn received subscriptions of
Rs 62.40bn from over 1 mn investors
Received Rs 1bn of deposits on day 1, Rs 10bn by the end
of first year and Rs 27bn at the end of 3 years
GTB won Best Export Performance Award from the Gem
and Jewelry industry
Established more than 500,000 client relationships
Present in all major cities, systematically spreading
coverage in smaller cities
Rated first amongst India Best Banks by Financial Express

Business Model of GTB

Adopted a simple expedient of offering high deposit
rates to investors
Loans given mainly on the basis of personal guarantee
without any collateral security
GTB has spread its higher deposit rates over its
lending rates
GTB focused its lending to the small and medium
companies, which could be charged higher rate of
interest
Within SMEs, GTB focused on exporters of garments,
diamonds, IT, pharmaceuticals etc and give loans at
higher interest rates

First Sign of Trouble

Credit decision process.
In 2000, bank fell short of capital
Lend to capital market (Ketan
Parekh)
2001-02, it suffered a nearly 60
per cent fall in net profits
Share price- 2001- 25.70
2004 - 3.60

Share price of GTB

80
70
60
50
40
30

share price

20
10
0

1995

96

97

98

99

2000

01

02

03

Oriental Bank of Commerce (OBC)

Profile
Established in Feb 1943 in Lahore
After partition shifted to Amritsar
Nationalized on April 1980
Nationwide network of 1323 Branches
The merger allows OBC to expand its
operations in the south which is Global Trust
Banks operational territory." B.D. Narang, ,
CMD, Oriental Bank of Commerce

Oriental Bank of Commerce

Chairman : T.Y.Prabhu
Ex Director : Ratnakar Hegde
S.C Sinha
Head-office: New Delhi
Directors : V Vijay Sai Reddy
U K Khaitan
R S Maharishi
Sumita Dawra

Achievement
OBC crosses business of Rs 2 lac crore
NP Rs 1000 crs reaches 1134.68 crs
growth 25.32 %
Operating profit Rs 2412.50 crore
Branch Network1500
ATM Network 1000
Client Base 13.5 million
Dividend for the year @ 91%

Products of OBC

Credit Schemes
Social Banking
Corporate Banking
Business Sector
Flexi Fixed Deposit Scheme

Awards and Recognition

Ranked among top 50 companies by the

leading financial daily, Economic Times.
Ranked as 323rd biggest bank in the world by
Bankers Almanac (January 2006), London.
Earned 9th place among India's Most Trusted
top 50 service brands in Economic TimesA.C Nielson Survey.
Included in the top 1000 banks in the world
according to The Banker, London.

Benefits to OBC
Additional104 branches
Additional 275 ATMs
And a workforce of over 1400
employees
GTBs shareholders would not get
OBC shares
Tax benefits
The face value of GTB shares from
Rs 10 to Re 1
Willing to pay a 6:1 swap value

Benefits to GTB
Equally beneficial for GTB depositors
Enjoy the trust of a public sector
bank.
Immense success of public sector
banks in India.
The interests of GTB's depositors
were safeguarded, its shareholders
(51 per cent of its equity is held by
small investors)

THANK YOU