PRESENTATION

ON :-
Mergers anD Acquisitions
SUBMITTED BY
SUBMITTED TO :-
Ritikaa THOMAS
:- (MBA/45010/21)
PROF. dr. Abhishek singh NIKHIL KUMAR
BIRLA INSTITUTE OF (MBA/45018/21)
TECHNOLOGY, MESRA, OFF
 TABLE OF
S. NO. CONTENTS :-
TITLE PAGE
NO.
1. MERGER 3
2. Acquisition 4
3. Types of Mergers anD Acquisitions 5
4. STRUCTURING OF MERGERS 6
5. REAL LIFE EXAMPLE OF MERGER 7 - 10
AND
ACQUISITION.
 MERGER
 A MERGER IS THE COMBINATION OF TWO FIRMS, WHICH
:-
SUBSEQUENTLY FORM A NEW LEGAL ENTITY UNDER THE BANNER
OF
ONE CORPORATE NAME.
 A MERGER DESCRIBES TWO FIRMS, OF APPROXIMATELY THE SAME

SIZE, THAT JOIN FORCES TO MOVE FORWARD AS A SINGLE NEW

ENTITY, RATHER THAN REMAIN SEPARATELY OWNED And
OPERATED.
 IN A MERGER, THE BOARDS OF DIRECTORs FOR TWO COMPANIES
APPROVE THE COMBINATION AND SEEK SHAREHOLDERS'
APPROVAL.
 Acquisition :-
 When one company takes over another and establishes itself as the new owner,
the purchase is called an acquisition.
 In an acquisition, one company purchases another outright.
 In an acquisition, the acquiring company obtains the majority stake in the
acquired firm, which does not change its name or alter its organizational
structure.
 If a firm buys more than 50% of a target company's shares, it effectively gains
control of that company.
 If a firm buys more than 50% of a target company's shares, it effectively gains
control of that company.
 Types of Mergers and Acquisitions :-
 Consolidations
Consolidation creates a new company by combining core businesses and abandoning the old
corporate structures. Stockholders of both companies must approve the consolidation, and
subsequent to the approval, receive common equity shares in the new firm.

 Tender Offers
In a tender offer, one company offers to purchase the outstanding stock of the other firm
at a specific price rather than the market price. The acquiring company communicates the
offer directly to the other company's shareholders, bypassing the management and board
of directors.

 Acquisition of Assets
In an acquisition of assets, one company directly acquires the assets of another company.
The company whose assets are being acquired must obtain approval from its shareholders.

 Management Acquisitions
In a management acquisition, also known as a management-led buyout (MBO), a company’s
executives purchase a controlling stake in another company, taking it private. 
 STRUCTURING OF
MERGERS
Mergers :- in a number of different ways, based on
can be structured
the relationship between the two companies involved in the deal :-
 Horizontal merger: Two companies that are in direct competition and share the same
product lines and markets.
 Vertical merger: A customer and company or a supplier and company. Think of an ice
cream maker merging with a cone supplier.
 Congeneric mergers: Two businesses that serve the same consumer base in different
ways, such as a TV manufacturer and a cable company.
 Market-extension merger: Two companies that sell the same products in different
markets.
 Product-extension merger: Two companies selling different but related products in the
same market.
 Conglomeration: Two companies that have no common business areas.
 REAL LIFE EXAMPLE OF MERGER AND
ACQUISITION :-
1. Successful acquisition: Disney, Pixar and Marvel –
Mass media conglomerate Disney found enormous success with two very famous
acquisitions; first, of animation heavyweight Pixar, then Marvel Entertainment.

Walt Disney Co. acquired Pixar in 2006 for $7.4 billion, and has since seen tremendous
success with films like Finding Dory and Toy Story 3 – each of which have generated billions
of dollars in revenue for the company.
One of the main reasons for the success of this acquisition was the access it gave Disney to
Pixar’s advanced animation technology. By keeping Pixar’s culture distinct, Disney was able
to generate significant value without destroying what made Pixar unique or successful.
Shortly after, Disney acquired Marvel Entertainment, paying $4 billion for the entertainment
company in 2009. With a highly lucrative string of Marvel films premiering at the box office
since then, they have already made their money back – with more to come, no doubt.
2. Successful merger: Exxon and Mobil –
Exxon Corp. and Mobil Corp. - the first and second largest oil
producers in the United States - made headlines when they
announced their merger in 1998. This type of merger is a classic
example of a horizontal merger. The megadeal closed at $80 billion,
with investors quite literally quadrupling their money in the process. 
The merger created one of the world’s preeminent oil
companies with revenues of $200 billion and worldwide
production of 2.5 million barrels of oil a day.
The average growth rate of net income in the premerger
Period increased from 12.9% to 19.78% in the post-merger period.
3. Failed merger: AOL and Time Warner :-
the AOL and Time Warner merger was initially anticipated to create exciting
synergies and results. The deal between the communications and media giants
was signed in 2000 for a massive $350 billion, but just two years later the
merged company was reporting a $99 billion loss.
the integration of two very different company cultures was one of the major
challenges. AOL was viewed as ‘more aggressive’ by Time Warner, a more
staid and traditionally corporate culture. The two companies came to resent
each other and valuable synergies were never realized AND the merger
DISSOLVED in 2009.
4. Failed acquisition: eBay and Skype :-
eCommerce giant eBay purchased Skype for $2.6 billion back in 2005, thinking
that buyers and sellers could better connect with their video communication
tools. The acquisition was a major flop, with users continuing to prefer email to
organize and execute their transactions.
Skype’s management team was reportedly changed four times in four years by
eBay in an attempt to salvage the acquisition, before they finally sold off 65% of
the company in 2009.