Cross Border Mergers And Acquisitions

(Horizontal)

Kavitha
18382024
Keerthana
18282025
 Horizontal Merger
• Combination of two or more organizations in
the same business
• Merger helps the company to share
information, technology, resources -
increasing the overall strengths of the
company
• Companies go for a merger for many reasons,
both financial and non-financial.
• Horizontal mergers are usually considered for
non-financial reasons.
 Types of Mergers
• Horizontal mergers
• Vertical mergers
• Concentric mergers
• Conglomerate mergers
 Acquisition

• acquisition is the process by which one

company acquires another company.
• financially strong company acquires more
than 50% of shares to take over another
company.
• acquisition doesn’t always happen on friendly
terms
 Types of Acquisitions
• Friendly takeover
• Hostile takeover
• Reverse takeover
 Reasons for Mergers & Acquisitions

Why the buyer wishes to merge

 To increase the value of the organisation’s stock

 To increase the growth rate and make a good investment
 To improve the stability of its earnings and sales
 To balance, complete or diversify its product line
 To reduce competition
 To acquire a needed resource quickly
 To avail tax concession and benefits
 To take advantages of synergy
Why the seller wishes to merge
 To increase the value of the owner’s stock and
investment
 To increase the growth rate
 To acquire resources to stabilise operations
 To benefit from tax legislation
 To deal with top management succession problem
M&A Process
• British multinational pharmaceutical company
• Headquarters - Brentford, London
• merger of the British pharmaceutical
companies Glaxo Wellcome and SmithKline
Beecham
 Acquisition
• TATA Motors acquired Jaguar Land Rover
• Tata Motors-owned Jaguar Land Rover (JLR) is
set to launch as many as half a dozen electric
vehicles in the Indian markets, starting 2020
 Advantages
• new market
• Reducing competition
• skilled labor force
• Increase the customer base
• New technologies
• Increased Revenue
• tax advantages
• Creating economies of scale
 Disadvantages
• Loss of experienced workers
• Employees require exhaustive re-skilling
• frictions and internal competition occur
among the staff of the united companies
• legal issues
• Political parties
• Managerial issues
• Cultural Integration difficulties
 References
Website:
• https://www.wallstreetmojo.com/horizontal-
merger/
• https://www.myaccountingcourse.com/accountin
g-dictionary/horizontal-merger
Books:
• Strategic Management & Business Policy – Azhar
Kazmi
• Mergers, Acquisitions & Corporate Restructuring
– Chandrasekar Krishnamurti, Vishwanath S.R.