Project Report Of Merger Acquisition

c

     

MERGER & ACQUISITION (Submitted in partial fulfillment of the requirements of •
 Gradua Dipl a in Bu
in

Adini
rai n, SCDL, Pune)

Submitted by: NAME: M
 Ania Raina REGISTRATION NO- 200622621 PGDBA - FINANCE SYMBIOSIS, SCDL, •UNE ACADEMIC YEAR-2006

•


c

     

NO OBJECTION CERTIFICATE Thi
i


crify ha Ania Raina i
an pl y

f hi
M/
BGIL

in
iu/ rganizai n f r h pa
 f ur yar


W hav n

ci n f r hi/hr  carry u a pr c w rk ild ³Mrgr &

Acqui
ii n
 in ur rganizai n and f r
uiing h
a  h Dirc r, SCDL a
a par f fulfiln f h •GDBA •r gra

W wi
h hi/hr all h
ucc



Sal f h c pany

Signaur f h c pn auh riy f h In
iu / Organizai n

•lac: Da:

•


c

     



DECLARATION BY THE LEARNER Thi
i
 dclar ha I hav carrid u hi
pr c w rk y
lf in par fulfiln f h •GDBA •r gra f SCDL Th w rk i
riginal, ha
n  n c pid fr  anywhr l
 and ha
n  n
uid  any hr Univr
iy/In
iu f r an award f any dgr/dipl a

Da:

•lac:

Signaur:

Na

•


c

     

CERTIFICATE OF SUPERVISOR(GUIDE) Crifid ha h w rk inc rp rad in hi
•r c Rp r Mrgr &Acqui
i n
in India
uid y Ania Raina i
hr riginal w rk and c pld undr y
uprvi
i n Marial aind fr  hr
urc
ha
n duly ackn wldgd in h •r c Rp r

Da:

Signaur f Guid:

•lac:

•


c

     

INDEX Sl N

•aricular


•ag n 

1

Inr duci n  Mrgr & Acqui
ii n

05

2

Mrgr

07

3

Acqui
ii n

09

Typ
f Acqui
ii n 4

10

Tak vr

11

Typ
f Tak vr

12-13

5

Hi
 ry Of Mrgr & Acqui
ii n

14-17

6

Typ
f Mrgr

18-29

7

Di
inci n wn Mrgr & Acqui
ii n

30

8

Advanag f Mrgr & Acqui
ii n

31

9

M ivai n
F r Mrgr
And Acqui
ii n


32-35

10

Bnfi
f Mrgr

36

11

Sp
f Mrgr & Acqui
ii n

37-38

12

Ra
n
f r Mrgr

39-43

13

Valuai n
f Mrgr

44-47

14

Financial a
pc
f Mrgr

48-49

15

Tax a
pc
f Mrgr & Acqui
ii n


50-52

11

•r cdur f r Tak vr & Acqui
ii n

53-56

12

•urp
 f Mrgr& Acqui
ii n

57-59

13

Mrgr & Acqui
ii n in India

60

14

61-63

15

64-67

16

68-71

•


c

      17

Mrgr And Acqui
ii n Lgal •r cdur
f C pani


72-79

18

C nclu
i n

80

19

Bili graphy

81

•
 

c

     

Introduction to Mergers and Acquisition W hav n larning a u h c pani
c ing  ghr  fr  an hr c pany and c pani
aking

vr h xi
ing c pani


xpand hir

u
in



Wih rc

i n aking  ll f any Indian u
in


and h fling f in
curiy
urging vr ur u
in

n, i i
n 
urpri
ing whn w har a u h in
 nur
f c rp ra r
rucuring
aking plac, 
pcially in h la
 c upl f yar


Svral c pani
hav n akn

vr and
vral hav undrg n

inrnal r
rucuring, whra
crain c pani
in h
a fild f u
in

hav f und i nficial  rg  ghr in

n c pany

In hi
c nx, i w uld  

nial f r u


undr
and wha c rp ra

r
rucuring and rgr
and acqui
ii n
ar all a u Th phra
 rgr
and acqui
ii n
(arviad M&A) rfr


h a
pc

f c rp ra
ragy,

c rp ra financ and anagn daling wih h uying,
lling and c ining f diffrn c pani
ha can aid, financ, r hlp a gr wing c pany in a givn indu
ry gr w rapidly wih u having  cra an hr u
in

niy Thu
ip ran i

u
 h f r u
in

dci
i n and pulic p licy f rulai n hav n rai
d N fir i
rgardd
af fr  a ak vr p

iiliy On h  r p
iiv
id Mrgr
&Acqui
ii n¶
ay  criical f r h halhy xpan
i n and gr wh f h fir Succ

ful nry in nw pr duc and g graphical ark
ay rquir Mrgr
&Acqui
ii n¶
a

ag in h fir
dvl pn

•
 

c

      Succ

ful c pii n in inrnai nal ark
ay dpnd

n capailii


aind in a ily and fficin fa
hi n hr ugh Mrgr
& Acqui
ii n
 Many hav argud ha rgr
incra
 valu and fficincy and  v r
urc
 hir high
 and 
 u

, hry incra
ing
harh ldr valu T

p f r a rgr r

n  i
a c plx affair, 
pcially in r
f h chnicalii
inv lvd W hav di
cu

d al
 all fac r
ha h anagn ay hav  l k in f r g ing f r rgr

C n
idral a un f rain
 ring w uld  rquird y h anagn
 rach a c nclu
i n g a du dilignc rp r w uld clarly idnify h
au
f h c pany in r
pc f h financial p
ii n al ng wih h n w rh and pnding lgal ar
and dail
a u vari u
c ningn liailii
 Dci
i n ha
  akn afr having di
cu

d h pr
& c n
f h pr p
d rgr & h ipac

f h
a

n h u
in

, adini
raiv c

nfi
, addii n 


harh ldr
valu, ax iplicai n
including
ap duy and la
 u n  h la
 al


n h pl y
f h Tran
fr r r Tran
fr C pany

•


c

     

Merger Mrgr i
dfind a
c inai n f w

r  r c pani
in a
ingl c pany

whr n
urviv
and h hr
l
 hir c rp ra xi
nc Th
urviv r acquir
all h a


a
wll a
liailii
f h rgd c pany r c pani
 Gnrally, h
urviving c pany i
h uyr, which rain
i
idniy, and h xingui
hd c pany i
h
llr

Mrgr i
al
dfind a
aalgaai n Mrgr i
h fu
i n f w xi
ing c pani
 All a


, liailii
and h
 ck

r  r

f n c pany
and

ran
frrd  Tran
fr C pany in c n
idrai n f payn in h f r f:

ë Equiy
har
in h ran
fr c pany, ë Dnur
in h ran
fr c pany, ë Ca
h, r ë A ix f h a v  d
 In u
in

r c n ic
a rgr i
a c inai n f w c pani
in

n

largr c pany Such aci n
ar c  nly v lunary and inv lv
 ck
wap r ca
h payn  h arg S ck
wap i
fn u
d a
i all w
h
harh ldr
f h w c pani

har h ri
k inv lvd in h dal A rgr can r
l a ak vr u r
ul in a nw c pany na ( fn c ining h na
f h riginal c pani
) and in nw randing; in
 ca

, ring h c inai n a "rgr" rahr han an acqui
ii n i
d n purly f r p liical r arking ra
n


•
 

c

      Mrgr i
a financial 

l ha i
u
d f r nhancing l ng-r pr fiailiy y

xpanding hir prai n
 Mrgr
ccur whn h rging c pani
hav hir uual c n
n a
diffrn fr  acqui
ii n
, which can ak h f r f a h
il ak vr Th u
in

law
in US vary acr


a
and hnc h c pani
hav liid pi n
 pr c h
lv
fr  h
il ak vr
 On way a c pany can pr c i
lf fr  h
il ak vr
i
y planning
harh ldr
righ
, which i
alrnaivly kn wn a
³p i
n pill

If w rac ack  hi
 ry, i i

rvd ha vry fw rgr
hav acually addd  h
har valu f h acquiring c pany and c rp ra rgr
ay pr    n p li
ic pracic
y rducing c

, ax
c

Managr
ar c ncrnd wih ipr ving prai n
f h c pany, anaging h affair
f h c pany ffcivly f r all r und gain
and gr wh f h c pany which will pr vid h r dal
in rai
ing hir
au
, prk
and fring nfi


•
 

c

     

Acquisition An Acqui
ii n u
ually rfr
 a purcha
 f a
allr fir y a largr n Acqui
ii n, al
kn wn a
a ak vr r a uy u, i
h uying f n c pany y an hr Acqui
ii n


r ak vr


ccur wn h idding and h arg c pany

Thr ay  ihr h
il r frindly ak vr
 Acqui
ii n in gnral
n
 i
acquiring h wnr
hip in h pr pry In h c nx f u
in

c inai n
, an acqui
ii n i
h purcha
 y n c pany f a c nr lling inr
 in h
har capial f an hr xi
ing c pany Methods of Acquisition: An acqui
ii n ay  affcd y a) agrn wih h pr
n
h lding a riy inr
 in h c pany anagn lik r
f h  ard r a r
harh ldr
c anding a riy f v ing p wr; ) purcha
 f
har
in pn ark; c)  ak ak vr ffr  h gnral  dy f
harh ldr
; d) purcha
 f nw
har
y priva ray; ) Acqui
ii n f
har capial hr ugh h f ll wing f r
f c n
idrai n
viz an
f ca
h, i

uanc f l an capial, r in
uranc f
har capial

•


c

      There is different type of acquisition:A Reverse takeover: -S i
, h wvr, a
allr fir will acquir anagn c nr l f a largr r l ngr 
ali
hd c pany and kp i
na f r h c ind niyThi
i
kn wn a
a rvr
 ak vr a Rvr
 ak vr ccur
whn h arg fir i
largr han h idding fir In h c ur
 f acqui
ii n
h iddr ay purcha
 h
har r h a


f h arg c pany In h f rr ca
, h c pani
c ak vr arg i
unwilling 

pra in ng iai n
; in h lar ca
, h

  ugh

r h arg
 ard ha
n

pri r

kn wldg f h ffr B Reverse merger: - A dal ha nal
a priva c pany  g pulicly li
d in a
h r i pri d a A rvr
 rgr ccur
whn a priva c pany ha ha

r ng pr
pc
and i
agr  rai
 financing uy
a pulicly li
d
hll c pany, u
ually n wih n u
in

and liid a


  Achiving acqui
ii n
ucc

ha
pr vn   vry difficul, whil vari u

udi
hav
h wd ha 50% f acqui
ii n
wr un
ucc

ful Th acqui
ii n pr c

i
vry c plx, wih any din
i n
influncing i
uc 

Takeover: •


c

      In u
in

, a ak vr i
h purcha
 f n c pany (h arg) y an hr (h acquirr, r iddr) In h UK, h r rfr
 h acqui
ii n f a pulic c pany wh

har
ar li
d n a
 ck xchang, in c nra
  h acqui
ii n f a priva c pany

A µak vr¶ i
acqui
ii n and  h h r
ar u
d inrchangalyTak vr diffr
fr  rgr in appr ach 

u
in

c inai n
i h pr c



f

ak vr, ran
aci n inv lvd in ak vr, drinai n f
har xchang r ca
h pric and h fulfilln f g al
f c inai n all ar diffrn in ak vr
han in rgr
 F r xapl, pr c

f ak vr i
unilaral and h ffr r c pany dcid
a u h axiu pric Ti akn in c pli n

f

ran
aci n i
l

in ak vr han in rgr
,  p anagn f h ffr c pany ing  r c - praiv

There are different types of takeover:1 Frindly ak vr
2 H
il ak vr
3 Rvr
 ak vr


1. Friendly Takeovers •


c

      Bf r a iddr ak
an ffr f r an hr c pany, i u
ually fir
 inf r
ha c pany
 ard f dirc r
 If h  ard fl
ha accping h ffr
rv

harh ldr
r han rcing i, i rc nd
h ffr  accpd y h
harh ldr
 In a priva c pany, cau
 h
harh ldr
and h  ard ar u
ually h
a p pl r cl
ly c nncd wih n an hr, priva acqui
ii n
ar u
ually frindly If h
harh ldr
agr 
ll h c pany, hn h  ard i
u
ually f h
a ind r
ufficinly undr h rdr
f h
harh ldr
 c

pra

wih h iddr Thi
p in i
n  rlvan  h UK c ncp f ak vr
, which alway
inv lv h acqui
ii n f a pulic c pany H
il ak vr


G. Hostile Takeovers A h
il ak vr all w
a
ui r 

ypa

a arg c pany
anagn

unwilling  agr  a rgr r ak vr A ak vr i
c n
idrd "h
il" if h arg c pany
 ard rc
h ffr, u h iddr c ninu
 pur
u i, r h iddr ak
h

ffr wih u inf ring h arg c pany
 ard

f rhand A h
il ak vr can  c nducd in
vral way
 A ndr ffr can  ad whr h acquiring c pany ak
a pulic ffr a a fixd pric a v h currn ark pric Tndr ffr
in h USA ar rgulad wih h Willia
Ac

•


c

      An acquiring c pany can al


ngag in a pr xy figh, whry i ri


pr
uad n ugh
harh ldr
, u
ually a
ipl a riy, 

rplac h

anagn wih a nw n which will appr v h ak vr An hr h d inv lv
quily purcha
ing n ugh
 ck n h pn ark, kn wn a
a crping ndr ffr,  ffc a chang in anagn In all f h
 way
, anagn r
i

h acqui
ii n u i i
carrid u anyway

·. Reverse takeovers A rvr
 ak vr i
a yp f ak vr whr a priva c pany acquir
a pulic c pany Thi
i
u
ually d n a h in
igai n f h largr, priva c pany, h purp
 ing f r h priva c pany  ffcivly fl a i
lf whil av iding
 f h xpn
 and i inv lvd in a c nvni nal I•O H wvr, undr AIM rul
, a rvr
 ak- vr i
an acqui
ii n r acqui
ii n
in a wlv  nh pri d which f r an AIM c pany w uld: ë

xcd 100% in any f h cla



; r

ë

r
ul in a fundanal chang in i
u
in

,  ard r v ing c nr l; r

ë

in h ca
 f an inv
ing c pany, dpar
u
anially fr  h inv
ing
ragy
ad in i
adi

i n d cun r, whr n adi

i n d cun wa
pr ducd n adi

i n, dpar
u
anially fr  h inv
ing
ragy
ad in i
pr-adi

i n ann uncn r, dpar
u
anially fr  h inv
ing
ragy

•


c

     

History of Mergers and Acquisitions Tracing ack  hi
 ry, rgr and acqui
ii n
hav v lvd in fiv
ag
and ach

f h
 ar di
cu

d hr A

n fr  pa
 xprinc rgr
and

acqui
ii n
ar riggrd y c n ic fac r


Th acr c n ic nvir nn, which includ
h gr wh in GD•, inr
 ra
and  nary p lici
play a ky r l in d
igning h pr c

f rgr
r acqui
ii n
wn c pani
r rganizai n


First Wave Mergers Th fir
 wav rgr
c ncd fr  1897  1904 During hi
pha
 rgr ccurrd wn c pani
, which n yd  n p ly

vr hir lin


f

pr duci n lik railr ad
, lcriciy c

Th fir
 wav rgr
ha ccurrd during h af r
aid i pri d wr 
ly h riz nal rgr
ha  k plac wn havy anufacuring indu
ri


End of 1st Wave Merger Ma riy f h rgr
ha wr c ncivd during h 1
 pha
 ndd in failur
inc hy c uld n  achiv h d
ird fficincy Th failur wa
fulld y h
l wd wn f h c n y in 1903 f ll wd y h
 ck ark cra
h f 1904 •
 

c

      Th lgal fraw rk wa
n 
upp riv ihr Th Supr C ur pa

d h anda ha h anic piiv rgr
c uld  hald u
ing h Shran Ac

Second Wave Mergers Th
c nd wav rgr
ha  k plac fr  1916  1929 f cu
d

n h

rgr
wn lig p li
, rahr han  n p li
a
in h prvi u
pha
 Th c n ic 

 ha f ll wd h p
 W rld War I gav ri
  h
 rgr


Tchn l gical dvl pn
lik h dvl pn f railr ad
and ran
p rai n y   r vhicl
pr vidd h nc

ary infra
rucur f r
uch rgr


r

acqui
ii n
 ak plac

Th g vrnn p licy nc uragd fir
 w rk in uni
n Thi
p licy wa
iplnd in h 1920
 Th 2nd wav rgr
ha  k plac wr ainly h riz nal r c ngl ra in naur T indu
ri
ha wn f r rgr during hi
pha
 wr pr ducr


f priary al
, f d pr duc
, pr lu pr duc
,

ran
p rai n quipn
and chical
 Th inv
n
ank
playd a piv al r l in faciliaing h rgr
and acqui
ii n


End of Gnd Wave Mergers Th 2nd wav rgr
ndd wih h
 ck ark cra
h in 1929 and h gra dpr

i n Th ax rlif ha wa
pr vidd in
pird rgr
in h 1940


Third Wave Mergers

•
 

c

      Th rgr
ha 

k plac during hi
pri d (1965-69) wr ainly

c ngl ra rgr
 Mrgr
wr in
pird y high
 ck pric
, inr
 ra
and
ric nf rcn f aniru
 law


Th iddr fir
in h 3rd wav rgr wr
allr han h Targ Fir Mrgr
wr financd fr  quii
; h inv
n ank
n l ngr playd an ip ran r l

End of the ·rd Wave Merger Th 3rd wav rgr ndd wih h plan c ngl ra
in 1968 I wa
al


du 

f h A rny Gnral  h p

r prf ranc


pli f h

c ngl ra
 S  rgr
in h 1970
hav
 prcdnc

Th 
 pr inn n
wr h INCO-ESB rgr; Unid Tchn l gi
and OTIS Elva r Mrgr ar h rgr wn C l Indu
ri
and Garl ck Indu
ri


Fourth Wave Merger Th 4h wav rgr ha
ard fr  1981 and ndd y 1989 wa
characrizd y acqui
ii n arg
ha wrn uch largr in
iz a
c pard  h 3rd wav rgrMrgr


k plac wn h

il and ga
indu
ri
, pharacuical

indu
ri
, anking and airlin indu
ri
 F rign ak vr
ca c  n wih 
 f h ing h
il ak vr
 Th 4h Wav rgr
ndd wih ani ak vr law
, Financial In
iui n
Rf r and h Gulf War

•


c

     

Fifth Wave Merger Th 5h Wav Mrgr (1992-2000) wa
in
pird y gl alizai n,
 ck ark 

 and drgulai n Th 5h Wav Mrgr 

k plac ainly in h anking

and lc unicai n
indu
ri
 Thy wr 
ly quiy financd rahr han d financd Th rgr
wr drivn l ng r rahr han
h r r pr fi  iv
 Th 5h Wav Mrgr ndd wih h ur
 in h
 ck ark ul Hnc w ay c nclud ha h v lui n

f rgr
and acqui
ii n
ha
n l ng drawn Many c n ic

fac r
hav c nriud i
dvl pn

•
 

c

     

Types of Merger Mrgr r acqui
ii n dpnd
up n h purp
 f h ffr r c pany i wan
 achiv Ba
d n h ffr r civ
pr fil, c inai n
c uld  vrical, h riz nal, circular and c ngl raic a
prci
ly d
crid l w wih rfrnc  h purp
 in viw

f h

ffr r c pany Mrgr yp
can  r adly

cla

ifid in h f ll wing fiv
uhad
a
d
crid l w

1. Horizontal Merger: - rfr
 h rgr f w c pani
wh ar dirc c pi r
f n an hr Thy
rv h
a ark and
ll h
a pr duc

G. Conglomeration: -rfr
 h rgr f c pani
, which d n  ihr
ll any rlad pr duc
r car  any rlad ark
 Hr, h w c pani
nring h rgr pr c

d n  p



any c  n u
in

i


·. Vertical Merger: - i
ffcd ihr wn a c pany and a cu
 r r wn a c pany and a
upplir

4. Product-Extension Merger: - i
xcud a ng c pani
, which
ll diffrn pr duc
f a rlad cag ry Thy al

k 
rv a c  n ark Thi
yp f rgr nal
h nw c pany  g in f r a p

ling in f hir

pr duc

a

rv a c  n ark, which wa
arlir fragnd a ng h

5. Market-Extension Merger: - ccur
wn w c pani
ha
ll idnical pr duc
in diffrn ark


•
 

c

      It basically expands the market base of the product 1 Crifid Mrgr
and Acqui
ii n
2H riz nal Mrgr
3Vrical Mrgr
4Mark Exn
i n Mrgr and •r duc Exn
i n Mrgr 5C ngl ra Mrgr


1. Certified Mergers and Acquisitions

Thr ar a nur f crifid rgr
and acqui
ii n
advi
ry pr gra
availal a h pr
n i Wih h hlp f h
 pr gra
, a l  f c rcial nii
ar ging inv lvd in rgr and acqui
ii n acivii
 Th
 pr gra
ar ffrd y nur u
rgr and acqui
ii n c n
ulan
and agnci
 S  f h ar al
c nducing ducai nal pr gra
and
inar
f r h purp
 f ducaing financial pr f

i nal
a u h nuanc
f crifid rgr
and acqui
ii n
and gr wing h kn wldg a
 f h rgr and acqui
ii n pr f

i nal


On f h 
 ip ran crifid rgr and acqui
ii n advi
ry pr gra
i
h Crifid Valuai n Managr •r gra ffrd y h Arican Acady f Financial Managn (AAFM) Th Arican Acady f Financial Managn i
al
h
ing a nur f Crifid Valuai n Managr Training C nfrnc
hr ugh u h yar

•


c

      Th crifid rgr
and acqui
ii n
agnci
hlp c rcial nrpri

r u
in

c rp rai n
in acquiring r aking vr hr c pani
and al
in
ignifican i

u
rlad  rgr
and acqui
ii n
 Th
 agnci
al
hlp u
in

nii
rgarding anagn uy u
(MBO
), finding acqui
ii n l kup,
urc
f quiy and d financing, a
wll a
valuai n f u
in




In hi
 drn-day w rld, h p wr f gl alizai n, ark liralizai n and chn l gical advancn ha
c nriud  ward
h f rai n f an incra
ingly c piiv and aciv c rcial w rld, whr rgr
and acqui
ii n
ar  r and  r uilizd f r achiving piizai n f fir valu and c piiv nfi


With the help of certified merger and acquisition advisory services, the clients can enjoy instant accessibility to:

ë A larg nur ulinai nal

f crifid u
in

purcha
r
, which includ

r ran
nai nal c rp rai n
wh

ar
king 

uy

pr fial c pani


ë A plaf r f h rgr and acqui
ii n pr f

i nal
,
urc
f funding, ran
aci n akr
, inrdiari
and ax pr f

i nal


ë Kn wldgal principal
ë Advic
n pricing and valuai n

•


c

      ë F rward-l king ran
aci n f rai n, which will lad  valu addii n Th crifid rgr
and acqui
ii n advi
ry
rvic
can  r adly cag rizd in h f ll wing yp
:

ë Bu
in

Valuai n Srvic
ë Funding Srvic
(Acqui
ii n financing, rcapializai n
, financial rc n
ruci n)

ë A

 Di
p
al Srvic
ë Acqui
ii n L kup ë Managn Buy u
(MBO
) ë Crifid

Equipn

and

Machinry

E
iai n

G. Horizontal Mergers

ë I i
a rgr

f w

c ping fir
which ar a h
a
ag

f

indu
rial pr c

 Th acquiring fir l ng
 h
a indu
ry a
h arg c pany ë Th ain purp


f
uch rgr
i


ain c n i


f
cal in

pr duci n y liinaing duplicai n f facilii
and h prai n
and r adning h pr duc lin, rduci n in inv
n in w rking capial, •


c

      liinai n in c pii n c ncnrai n in pr duc, rduci n in advri
ing ë C

, incra
 in ark
gn
and xrci
 r c nr l n ark ë H riz nal rgr
ar h
 rgr
whr h c pani
anufacuring
iilar kind
f c  dii
r running
iilar yp f u
in


rg wih ach hr ë Tw c pani
ha ar in dirc c pii n and
har
iilar pr duc lin
and ark
 In h c nx

f arking, h riz nal rgr i
 r

prvaln in c pari
n  h riz nal rgr in h c nx f pr duci n r anufacuring ë Th principal civ hind hi
yp f rgr
i
 achiv c n i
f
cal in h pr duci n pr cdur hr ugh carrying ff duplicai n f in
allai n
,
rvic
and funci n
, widning h lin f pr duc
, dcra
 in w rking capial and fixd a


inv
n, ging rid f c pii n, iniizing h advri
ing xpn

, nhancing h ark capailiy and  g  r d inanc n h ark ë Nvr h l

, h h riz nal rgr
d n  hav h capaciy  n
ur h ark a u h pr duc and
ady r uninrrupd raw arial
upply ë H riz nal rgr
can
i
r
ul in  n p ly and a
rpi n f c n ic p wr in h hand
f a
all nur f c rcial nii


•


c

      ë Acc rding 
ragic anagn and icr c n ic
, h xpr

i n h riz nal rgr dlina
a f r f pr pri r
hip and c nr l I i
a plan, which i
uilizd y a c rp rai n

r c rcial nrpri
 f r

arking a f r f c  diy r
rvic in a larg nur f ark
 Horizontal Integration S i
, h riz nal rgr i
al
calld a
h riz nal ingrai n I i
 ally pp
i in naur  vrical rgr r vrical ingrai n Horizontal Monopoly A  n p ly f rd y h riz nal rgr i
kn wn a
a h riz nal  n p ly N rally, a  n p ly i
f rd y  h vrical and h riz nal rgr


H riz nal rgr i
ha c ndii n whr a c pany i
inv lvd in aking vr r acquiring an hr c pany in
iilar f r f rad In hi
way, a c pi r i
d n away wih and a widr ark and highr c n i


f
cal ar

acc pli
hd In h pr c

f h riz nal rgr, h d wn
ra purcha
r
and up
ra
upplir
ar al
c nr lld and a
a r
ul f hi
, pr duci n xpn

can  dcra
d Horizontal Expansion An xpr

i n which i
inialy c nncd  h riz nal rgr i
h riz nal xpan
i n Thi
rfr
 h xpan
i n r gr wh f a c pany in a
c r ha i
pr
nly funci ning Th ai hind a h riz nal xpan
i n i
 gr w i
ark
har f r a
pcific c  diy r
rvic Examples of Horizontal Mergers:F ll wing ar h ip ran xapl
f h riz nal rgr
: •


c

      ë Th f rai n

f Br

k B nd Lip n India Ld hr ugh h rgr

f

Lip n India and Br k B nd

ë Th rgr

f Bank

f Mahura wih ICICI (Indu
rial Crdi and

Inv
n C rp rai n f India) Bank

ë Th rgr f BSES (B ay Suuran Elcric Supply) Ld wih Ori

a • wr Supply C pany

ë Th rgr f ACC (r
whil A

ciad Cn C pani
Ld) wih Da dar Cn

·. Vertical merger A cu
 r and c pany r a
upplir and c pany hink f a c n
upplir rging wih an ic cra akr Vrical rgr
rfr  a
iuai n whr a pr duc anufacurr rg
wih h
upplir f inpu
r raw arial
 In can al
 a rgr wn a pr duc anufacurr and h pr duc
di
riu r A c pany w uld lik  ak vr an hr c pany r
k i
rgr wih ha c pany  xpand 
p u
ing ackward ingrai n  a

iila h r
urc
f
upply and f rward ingrai n  ward
ark ul
 Th acquiring c pany hr ugh rgr f an hr uni ap
n rduci n f invn ri
f raw arial and fini
hd g

d
, ipln
i
pr duci n plan
a
•
 

c

      pr h civ
and c n iz
n w rking capial inv
n
 In hr w rd
, in vrical c inai n
, h rging undraking w uld  ihr a
upplir r a uyr u
ing i
pr duc a
inrdiary arial f r final pr duci n

Th f ll wing ain nfi
accru fr  h vrical c inai n  h acquirr c pany i (1)i gain
a
r ng p
ii n cau
 f iprfc ark f h inrdiary pr duc
,
carciy f r
urc
and purcha
d pr duc
; (2)ha
c nr l vr pr duc

pcificai n


Vrical rgr
ay vi la h c piiv
piri f ark
 I can  u
d  l ck c pi r
fr  acc

ing h raw arial
urc

r h di
riui n

channl Hnc, i i
al
kn wn a
"vrical f rcl
ur" I ay cra a
r f  lnck pr l A
pr r
arch, vrical ingrai n can affc h pricing incniv f a d wn
ra pr ducr I ay al
affc a c pi r¶
incniv f r
lcing inpu
upplir


There are multiple reasons, which promote the vertical integration by firms. Some of them are discussed below. ë Th pri ra
n ing h rduci n

f uncrainy rgarding h

availailiy f qualiy inpu
a
al
h uncrainy rgarding h dand f r i
pr duc


•
 

c

      ë Fir
ay al
nr vrical rgr
 avail h plu
p in
f c n i
f ingrai n

ë Vrical rgr ay ak h fir
c
-fficin y
ralining i
di
riui n and pr duci n c

 I i
al


an f r h rduci n

f

ran
aci n
c

lik arking xpn

and
al
ax
 I n
ur
ha a fir
r
urc
ar u
d pially 4. Market-extension merger Tw c pani
ha
ll h
a pr duc
in diffrn ark
 A
pr dfinii n, ark xn
i n rgr ak
plac wn w c pani
ha dal in h
a pr duc
u in
para ark
 Th ain purp
 f h ark xn
i n rgr i
 ak
ur ha h rging c pani
can g acc

 a iggr ark and ha n
ur
a iggr clin a
 Example of Market Extension Merger

A vry g d xapl f ark xn
i n rgr i
h acqui
ii n f Eagl Banc
har
Inc y h RBC Cnury Eagl Banc
har
i
hadquarrd a Alana, G rgia and ha
283 w rkr
 I ha
al
 90,000 acc un
and l k
afr a


w rh US $11 illi n Eagl Banc
har
al
h ld
h Tuckr Fdral Bank, which i
n f h n igg
 ank
in h r p lian Alana rgi n a
far a
dp
i ark
har i
c ncrnd On f h a r nfi
f hi
acqui
ii n i
ha hi
acqui
ii n nal
h RBC  g ahad wih i
gr wh prai n
in h N rh Arican ark •


c

     

Wih h hlp f hi
acqui
ii n RBC ha
g  a chanc  dal in h financial ark f Alana, which i
a ng h lading upc ing financial ark
in h USA Thi
 v w uld all w RBC  divr
ify i
a
 f prai n


5. Product-extension merger Tw c pani

lling diffrn u rlad pr duc
in h
a ark Acc rding 

dfinii n, pr duc xn
i n rgr ak
plac wn w

u
in

rganizai n
ha dal in pr duc
ha ar rlad  ach hr and pra in h
a ark Th pr duc xn
i n rgr all w
h rging c pani


gr up  ghr hir pr duc
and g acc

 a iggr


f

c n
ur
 Thi
n
ur
ha hy arn highr pr fi
 Example of Product Extension Merger Th acqui
ii n f M ilink Tlc  Inc y Br adc  i
a pr pr xapl f pr duc xn
i n rgr Br adc  dal
in h anufacuring Blu h pr
nal ara nw rk hardwar
y

and chip
f r IEEE 80211 wirl

LAN

M ilink Tlc  Inc dal
in h anufacuring f pr duc d
ign
an f r hand

ha ar quippd wih h Gl al Sy
 f r M il C unicai n
chn l gy

I i
al
in h pr c

f ing crifid  pr duc wirl

nw rking chip
ha hav high
pd and Gnral •ack Radi Srvic chn l gy I i
xpcd ha •
 

c

      h pr duc


f M ilink Tlc  Inc w uld  c plning h wirl



pr duc
f Br adc 

u. Conglomeration Tw c pani
ha hav n c  n u
in

ara
 A
pr dfinii n, a c ngl ra rgr i
a yp f rgr whry h w c pani
ha rg wih ach hr ar inv lvd in diffrn
r
f u
in


 Th ip ranc f h c ngl ra rgr
li
in h fac ha hy hlp h rging c pani
  r han f r

Types of Conglomerate Mergers Thr ar w ain yp
f c ngl ra rgr
:-

1 pur c ngl ra rgr

2 Mixd c ngl ra rgr

1. Pure Conglomerate Merger

Th pur c ngl ra rgr i
n whr h rging c pani
ar d ing u
in


ha ar  ally unrlad  ach hr

•
 

c

      G. Mixed Conglomerate Merger

Th ixd c ngl ra rgr
ar

n
whr h c pani
ha ar

rging wih ach hr ar d ing
wih h ain purp
 f gaining acc

 a widr ark and clin a
 r f r xpanding h rang f pr duc
and
rvic
ha ar ing pr vidd y h Thr ar al

 hr
udivi
i n
f c ngl ra rgr
lik h financial c ngl ra
, h c ncnric c pani
, and h anagrial c ngl ra
 Reasons of Conglomerate Mergers Thr ar
vral ra
n
a
 why a c pany ay g f r a c ngl ra rgr A ng h  r c  n ra
n
ar adding  h
har f h ark ha i
wnd y h c pany and indulging in cr


lling Th c pani
al
l k  add 

hir

vrall
ynrgy and pr duciviy y ad ping h h d

f

c ngl ra rgr
 Benefits of Conglomerate Mergers Thr ar
vral advanag


f h c ngl ra rgr
 On

f h a r

nfi
i
ha c ngl ra rgr
a

i
 h c pani
 divr
ify A
a r
ul f c ngl ra rgr
h rging c pani
can al
ring d wn h lvl
f hir xp
ur  ri
k


•


c

     

Distinction between Mergers and Acquisitions Alh ugh hy ar fn urd in h
a rah and u
d a
h ugh hy wr
yn ny u
, h r
rgr and acqui
ii n an
lighly diffrn hing
:š Whn n c pany ak
vr an hr and clarly 
ali
hd i
lf a
h nw wnr, h purcha
 i
calld an acqui
ii n š Whn rgr happn
whn w fir
, fn f a u h
a
iz, agr  g f rward a
a
ingl nw c pany rahr han rain
paraly wnd and prad Thi
kind f aci n i
 r prci
ly rfrrd  a
a "rgr f qual
" š B h c pani

 ck
ar
urrndrd and nw c pany
 ck i
i

ud in i
plac A purcha
 dal will al
 calld a rgr whn  h CEO
agr ha  ining  ghr i
in h 
 inr
 f  h f hir c pani
 š Bu whn h dal i
unfrindly - ha i
, whn h arg c pany d 
n  wan   purcha
d - i i
alway
rgardd a
an acqui
ii n Thi
i
challngal š An acqui
ii n can  ihr frindly r h
il An xapl f a rcn frindly ak vr wa
whn Micr
f  ugh Fa
 Sarch and Tran
fr (OSE S ck Exchang, Tickr FAST)CEO

f h acquird c pany

(FAST) rvald ha hy had n w rking wih Micr
f f r  r han 6  nh
 g h dal which wa
ann uncd in January, 2008

•


c

     

Advantages of Mergers and Takeovers Mrgr
and ak vr
ar prann f r

f c inai n
which v
 in

anagn c pl c nr l and pr vid cnralizd adini
rai n which ar n  availal in c inai n
f h lding c pany and i
parly wnd
u
idiary

Sharh ldr
in h
lling c pany gain fr  h rgr and ak vr
a
h priu ffrd  induc accpanc f h rgr r ak vr ffr
uch  r pric han h 

k valu f
har
 Sharh ldr
in h uying c pany gain in

h l ng run wih h gr wh f h c pany n  nly du 
ynrgy u al
du  ³ 
rapping arning


•


c

     

Motivations for Mergers And Acquisitions Mrgr
and acqui
ii n
ar cau
d wih h
upp r f
harh ldr
, anagr¶
ad pr  r


f h c ing c pani
 Th fac r
, which  iva h


harh ldr
and anagr
 lnd
upp r  h
 c inai n
and h r
ulan c n
qunc
hy hav  ar, ar rifly n d l w a
d n h r
arch w rk y vari u

ch lar
gl ally

(1) From the Standpoint of Shareholders:-

Inv
n ad y
harh ldr
in h c pani

uc  nhanc in valu

Th
al

f
har
fr 

n c pany¶

harh ldr


rgr
h uld

an hr and h lding

inv
n in
har

h uld giv ri
  grar valu
i h pp runiy gain
in alrnaiv inv
n
 Sharh ldr
ay gain fr  rgr in diffrn way
viz fr  h gain
and achivn
f h c pany i hr ugh (a) ralizai n f  n p ly pr fi
; () c n i
f
cal
; (c) divr
ificai n f pr duc lin; (d) acqui
ii n f huan a


and hr r
urc
n  availal hrwi
; () r inv
n pp runiy in c inai n


On

r  r faur
w uld gnrally  availal in ach rgr whr


harh ldr
ay hav araci n and fav ur rgr •


c

     

(G) From the Standpoint of Managers Managr
ar c ncrnd wih ipr ving prai n
f h c pany, anaging h affair
f h c pany ffcivly f r all r und gain
and gr wh f h c pany which will pr vid h r dal
in rai
ing hir
au
, prk
and fring nfi


Mrgr
whr all h
 hing
ar h guarand uc  g
upp r fr  h anagr
 A h
a i, whr anagr
hav far f di
placn a h hand


f nw anagn in aalgaad c pany and al


r
ulan

dprciai n fr  h rgr hn
upp r fr  h c 
difficul

(·) Promoter¶s Gains

Mrgr
d

ffr  c pany pr  r
h advanag f incra
ing h
iz f

hir c pany and h financial
rucur and
rngh Thy can c nvr a cl
ly hld and priva liid c pany in a pulic c pany wih u c nriuing uch walh and wih u l
ing c nr l

(4) Benefits to General Public Ipac f rgr
n gnral pulic c uld  viwd a
a
pc f nfi
and c

 : (a) C n
ur f h pr duc r
rvic
; () W rkr
f h c pani
undr c inai n; •


c

      (c) Gnral pulic affcd in gnral having n  n u
r

r

c n
ur r h w rkr in h c pani
undr rgr plan

(a) Consumers

Th c n ic gain
ralizd fr  rgr
ar pa

d n  c n
ur
in h f r f l wr pric
and r qualiy f h pr duc which dircly rai
 hir
andard f living and qualiy f lif

Th alanc f nfi
in fav ur f c n
ur
will dpnd up n h fac whhr r n  h rgr
incra


r dcra
 c piiv c n ic and pr duciv

aciviy which dircly affc
h dgr f wlfar f h c n
ur
hr ugh chang
in pric lvl, qualiy f pr duc
, afr
al

rvic, c

(b) Workers Community

Th rgr r acqui
ii n f a c pany y a c ngl ra r hr acquiring c pany ay hav h ffc n  h h
id
f incra
ing h wlfar in h f r f purcha
ing p wr and hr i
ri
f lif Tw
id
f h ipac a
di
cu

d y h r
archr
and acadician
ar:

1 Mrgr
wih ca
h payn 
harh ldr
pr vid pp runii
f r h 

inv
 hi
 ny in

hr c pani
which will gnra furhr

pl yn and gr wh  uplif f h c n y in gnral

•
 

c

      2 Any r
rici n
placd

n
uch rgr
will dcra
 h gr wh and

inv
n aciviy wih c rr
p nding dcra
 in pl yn B h w rkr
and c unii
will
uffr prvning h di
riui n

n l

ning  

pp runii
,

f nfi
r
uling fr  divr
ificai n

f

pr duci n aciviy

(c) General Public

Mrgr
r
ul in cnralizd c ncnrai n f p wr Ec n ic p wr i
  undr
 d a
h ailiy  c nr l pric
and indu
ri
upu a
 n p li

 Such  n p li

affc
cial and p liical nvir nn  il vryhing in hir fav ur  ainain hir p wr ad xpand hir u
in

pir Th
 advanc
r
ul in c n ic xpl iai n Bu in a fr c n y a  n p li
 d 
n 
ay f r a l ngr pri d a
hr c pani
nr in h fild  rap h nfi
f highr pric

 in y h  n p li
 Thi
nf rc
c pii n in h ark a
c n
ur
ar fr 
u
iu h alrnaiv pr duc


Thrf r, i i
difficul  gnraliz ha rgr
affc h wlfar f gnral pulic advr
ly r fav raly Evry rgr f w

r  r c pani
ha
 

viwd fr  diffrn angl
in h u
in

pracic
which pr c
h inr
 f h
harh ldr
in h rging c pany and al

rv
h nai nal purp
  add  h wlfar f h pl y
, c n
ur
and d 
n  cra hindranc in adini
rai n f h G vrnn p lic


•
 

c

     

Benefits of Mergers 1 Lii c pii n 2 Uiliz undr-uilizd ark p wr 3 Ovrc  h pr l

f
l w gr wh and pr fiailiy in

n¶


wn

indu
ry 4 Achiv divr
ificai n 5 Gain c n i


f
cal and incra
 inc  wih pr p ri naly l



inv
n 6 E
ali
h a ran
nai nal ridghad wih u xc

iv
ar-up c

 gain acc

 a f rign ark 7 Uiliz undr-uilizd r
urc
- huan and phy
ical and anagrial
kill
 8 Di
plac xi
ing anagn 9 Circu g vrnn rgulai n
 10Rap
pculaiv gain
andan up n nw
curiy i

u r chang in •/E rai  11Cra an iag

f aggr

ivn

and
ragic

pp runi
, pir

uilding and  aa

va
 c n ic p wr f h c pany

•


c

     

Steps of Merger and Acquisitions Thr ar hr ip ran
p
inv lvd in h analy
i
f rgr and acqui
ii n
can  xplaind a
f ll w
: 1. Planning: Th 
 ip ran
p in rgr and acqui
ii n i
planning Th planning f acqui
ii n will rquir h analy
i


f indu
ry
pcific and h fir


pcific inf rai n Th acquiring fir will nd indu
ry daa n ark gr wh, naur

f c pii n, capial and la ur inn
iy, dgr

f

rgulai n c A u h arg fir h inf rai n ndd will includ h qualiy f anagn, ark
har,
iz, capial
rucur, pr fi ailiy, pr duci n and arking capailii
c, G. Search and Screening : Sarch f cu



n h w and whr 

l k f r
uial candida
f r

acqui
ii n Scrning pr c


h r li

a fw candida
fr  any availal Daild inf rai n a u ach f h
 candida
i
aind Mrgr

civ
ay includ aaining fa
r gr wh, ipr ving

pr fiailiy, ipr ving anagrial ffcivn

, gaining ark p wr and ladr
hip, achiving c
 rduci n c Th
 civ
can  achivd in vari u
way
rahr han hr ugh rgr al n Th alrnaiv
 rgr includ  in vnur,
ragic allianc
, liinai n

f infficin •
 

c

      prai n
, c
 rduci n and pr duciviy ipr vn, hiring capal anagr c If rgr i
c n
idrd a
h 
 alrnaiv, h acquiring fir u

ai
fy i
lf ha i i
h 
 availal pi n in r
f i
wn
crning criria and c n ically 
 araciv ·. Financial Evaluation : Financial valuai n f a rgr i
ndd  drin h arning
and ca
h fl w
, ara f ri
k, h axiu pric payal  h arg c pany and h 
 way  financ h rgr Th acquiring fir u
 pay a fair c n
idrai n  h arg fir f r acquiring i
u
in

 In a c piiv ark
iuai n wih capial ark fficincy, h currn ark valu i
h currn ark valu f i

har f h arg fir Th arg fir will n  accp any ffr l w h currn ark valu f i

har Th arg fir in fac, xpc ha rgr nfi
will accru  h acquiring fir A rgr i

aid   a a priu whn h ffr pric i
highr han h arg fir¶
pr rgr ark pric Th acquiring fir ay pay h priu if i hink
ha i can incra
 h arg fir¶
afr rgr y ipr ving i
prai n
and du 
ynrgy I ay hav  pay priu a
an incniv  h arg fir¶

harh ldr
 induc h 
ll hir
har

ha h acquiring fir i
nald 

ain h c nr l f h arg

fir •
 

c

     

Reasons for Merger Th ra
n f rgr can  r adly xplain a
f ll w
: 1. Accelerated Growth: Gr wh i


nial f r
u
aining h viailiy, dynai
 and valu nhancing capailiy

f a fir Gr wing

prai n
pr vid challng
and

xcin  h xcuiv
a
wll a
pp runii
f r hir   nrichn and rapid carr dvl pn Thi
hlp  incra
 anagrial fficincy Ohr hing
ing h
a, gr wh lad
 highr pr fi
and incra
 in h
harh ldr
valu I can  achiv gr wh in w way
: ë Expanding i
xi
ing ark
ë Enhancing in nw ark A fir ay xpand and divr
ify i
ark
inrnally r xrnally If c pany cann  gr w inrnally du  lack f phy
ical and anagrial r
urc
, i can gr w xrnally y c ining i


prai n
wih

hr c pani
hr ugh

rgr
and acqui
ii n


G. Enhanced Profitability : Th c inai n f w

r  r fir ay r
ul in  r han h avrag

pr fiailiy du  c
 rduci n and fficin uilizai n f r
urc
 Thi
ay happn cau
 f h f ll wing ra
n
: •


c

      a) Economies of Scale : Whn w

r  r fir c in, crain c n i
ar ralizd du  h

largr v lu

f prai n
f h c ind niy Th
 c n i
ari


cau


f  r inn
iv uilizai n

f pr duci n capacii
, di
riui n

nw rk
, nginring
rvic
, r
arch and dvl pn facilii
, daa pr c

ing
y

and


n

b) Operating Economies : In addii n  c n i
f
cal, a c inai n f w r
ul in c
 rduci n du 

r  r fir ay

praing c n i
 A c ind fir ay

av id r rduc funci n
and facilii
 I can c n
lida i
anagn funci n

uch a
anufacuring, R & D and rduc

praing c

 F 

xapl, a c ind fir ay liina duplica channl
f di
riui n r cra a cnralizd raining cnr r inr duc an ingrad planning and c nr l
y


c) Strategic Benefits : If a fir ha
dcidd  nr r xpand in a paricular indu
ry, acqui
ii n f a fir ngagd in ha indu
ry rahr han dpndnc n inrnal xpan
i n ay ffr
ragic advanag

uch a
l

ri
k and l

c
 •


c

     

d) Complementary Resources : If w fir
hav c plnary r
urc
i ay ak
n
 f r h  rg F r xapl, a
all fir wih an inn vaiv pr duc ay nd h nginring capailiy and arking rach f a ig fir Wih h rgr f h w fir
i ay  p

il 
ucc

fully anufacur and ark h inn vaiv pr duc Thu
, h w

fir
, hank


hir c plnary

r
urc
, ar w rh  r  ghr han hy ar
paraly

e) Tax Shields : Whn a fir wih accuulad l


and una
rd ax
hlr
rg
wih a pr fi aking fir, ax
hild
ar uilizd r Th fir wih accuulad l


and una
rd ax
hlr
ay n   al  driv ax advanag
f r a l ng i H wvr, whn i rg
wih a pr fi aking fir, i
accuulad l


and una
rd ax
hlr
can 
 ff again
 h pr fi
f h pr fi aking fir and ax nfi
can  quickly ralizd

·. Utilization of Surplus Funds: A fir in a aur indu
ry ay gnra a l  f ca
h u ay n  hav pp runii
f r pr fial inv
n M
 anagnha
a ndncy  •


c

      ak furhr inv
n
, vn h ugh hy ay n   pr fial In
uch a
iuai n a rgr wih an hr fir inv lving ca
h c pn
ai n

fn

rpr
n
a  r fficin uilizai n f
urplu
fund

4 Managerial Effectiveness: On

f h p nial gain


ffcivn

 Thi
ay

f rgr i
an incra
 in anagrial

ccur if h xi
ing anagn a, which i


prf ring p rly, i
rplacd y a  r ffciv anagn a An hr allid nfi f a rgr ay  in h f r f grar c ngrunc wn h inr

f anagr
and h
harh ldr
 A c  n argun f r craing a fav ral nvir nn f r rgr
i
ha i ip

a crain di
ciplin n h anagn

1. Diversification of Risk: A c  nly
ad  iv f r rgr
i
 achiv ri
k rduci n hr ugh divr
ificai n Th xn  which ri
k i
rducd, f c ur
, dpnd
n h c rrlai n wn h arning


f h rging nii
 Whil ngaiv

c rrlai n ring
grar rduci n in ri
k Th p
iiv c rrlai n ring
l

r rduci n in ri
k

•


c

     

G. Lower Financing Costs: Th c n
qunc f larg
iz and grar arning

ailiy, i
 rduc h c
 f  rr wing f r h rgd fir Th ra
n f r hi
i
ha h crdi r
f h rgd fir n y r pr ci n han h crdi r f h rging fir
indpndnly

•


c

     

Valuations of Merger Valuations: Any undr
anding n M&A i
inc pl wih u a di
cu

i n n valuai n During h c ur


f a rgr pr cdur, n rally a Charrd

Acc unan r a cag ry-I Mrchan Bankr i
app ind  w rk u h valu f
har


f c pani
inv lvd in h rgr Ba
d

n h valu



c pud h xchang rai i
w rkd u I i
h valu a which a uyr and
llr w uld ak a dal Thr ar crain a
ic fac r
, which drin h valu f a c pany

har A
h
 ar vry
uciv fac r
, valuai n
gnrally vary fr  ca
 

ca
 dpnding

n a

upi n
and fuur

pr ci n
 Th f ll wing
p
ar inv lvd in h valuai n

f a rgr

which can  r adly di
cu

d a
f ll w
:

ë

Idnify gr wh and pr fiailiy a

upi n
and
cnari


ë

•r c ca
h fl w


ë

E
ia h c
 f capial

ë

C pu N•V (N •r
n Valu) f r ach
cnari

ë

Dcid if h acqui
ii n i
araciv n h a
i
f N•V

ë

Dcid if h acqui
ii n
h uld  financd hr ugh ca
h r xchang f


har


•
 

c

      ë

Evalua h ipac f h rgr n E•S (Earning •r Shar) and •E

(•ric-arningrai ) 1. Cash Flow approach: In a rgr r acqui
ii n h acquiring fir i
uying h u
in

f h arg fir rahr han a
pcific a

 Thu
rgr i
a
pcial yp

f capial

udging dci
i n Thi

h uld includ h ffc f praing fficinci
and
ynrgy Th acquiring fir
h uld apprai
 rgr a
a capial udging dci
i n Th acquiring fir incur
a c
 (in uying h u
in

f h arg fir) in h xpcai n f a
ra f nfi
(in h f r f ca
h fl w
) in h fuur Th rgr will  advanag u
 h acquiring fir if h pr
n valu f h arg rgr i
grar han h c
 f acqui
ii n Mrgr
and acqui
ii n
inv lv c plx
 f anagrial pr l
han h purcha
 f an a

 Di
c und Ca
h Fl w (DCF) appr ach i
an ip ran 

l in analyzing rgr
and acqui
ii n
 Earning
ar a
i
f r 
iaing

ca
h fl w
 Ca
h fl w
includ adu
n
f r dprciai n, capial xpndiur and w rking capial Cash Flow = EBIT (1-T) + Depreciation ± Changes in Working Capital ± Changes in Capital Expenditure

•
 

c

      G. Earning Per Share (EPS) and P/E (Price Earning) ratio: In pracic, inv
 r aach
a l  f ip ranc  h arning pr
har (E•S) and h pric arning (•/E) rai  Th E•S and •/E rai i
h ark pric pr
har In h fficin ark, h ark pric f a
har
h uld  qual  h valu arrivd y h di
c und ca
h fl w chniqu Thu
, in addii n  h ark pric and h di
c un valu

f
har h rgr and acqui
ii n


dci
i n
ar al
valuad in r
f E•S, •/E rai ,  k valu c ·. Exchange Ratio: Th currn ark valu f h acquiring and h acquird fir
ay  akn a
h a
i
f r xchang f
har
 Exchange Ratio = Share price of the acquired firm/Share price of the acquiring firm (Pb/Pa). Th xchang rai in r
f h ark valu f
har
will kp h p
ii n f h
harh ldr
in valu r
unchangd afr h rgr
inc pr p ri na walh w uld rain a h pr rgr lvl Thr i
n incniv f r h
harh ldr
f h acquird fir, and hy w uld rquir a priu   paid y h acquiring c pany

•


c

      In h a
nc f n c n ic gain, h
harh ldr
f h acquiring fir w uld c  w r
 ff unl

h pric arning rai

f h acquiring fir

rain h
a f r h rgr Th
harh ldr
f h acquiring fir   r

ff afr h rgr wih u any n c n ic gain ihr h pric

arning
rai will hav  incra

ufficinly highr r h
har xchang rai i
l w, h pric arning rai raining h
a

•
 

c

     

Financial Aspects of Merger Thr ar any way
in which a rgr can r
ul in financial
ynrgy A rgr ay hlp in: ë liinaing h financial c n
rain ë dpl ying
urplu
ca
h ë nhancing d capaciy ë l wring h financial c
 I can  r adly xplain a
f ll w
: 1. Financial Constraint: A fir ay  c n
raind 

gr w hr ugh inrnal dvl pn du 


h rag f fund Th fir can gr w xrnally y acquiring an hr fir y h xchang f
har
and hu
, rla
 h financial c n
rain
 G. Surplus Cash: A fir ay  facd y a ca
h rich fir I ay n  hav n ugh inrnal pp runii
 inv
 i

urplu
ca
h I ay ihr di
riu i

urplu
ca
h  i

harh ldr
r u
 i  acquir
 hr fir Th
harh ldr
ay n  rally nfi uch if
urplu
ca
h i
rurnd  h
inc hy w uld hav  pay ax a rdinary inc  ax ra Thir walh ay incra
 hr ugh an incra
 in h ark valu f hir
har
if
urplu
ca
h i
u
d  acquir an hr fir If hy
ll hir
har
hy w uld pay ax a a l wr, capial gain •
 

c

      ax ra Th c pany w uld al
 nald  kp
urplu
fund
and gr w hr ugh acqui
ii n ·. Debt capacity: A rgr f w fir
, wih flucuaing, u ngaivly c rrlad, ca
h fl w
, can ring
ailiy f ca
h fl w
f h c ind fir Th
ailiy f ca
h fl w
rduc
h ri
k f in
lvncy and nhanc
h capaciy f h nw niy 
rvic a largr a un f d Th incra
d  rr wing all w
a highr inr
 ax
hild which add
 h
harh ldr
walh 4. Financing cost: D 
h nhancd d capaciy f h rgd fir rduc i
c


f

capial? Sinc h pr ailiy f in
lvncy i
rducd du  financial
ailiy and incra
d pr ci n  lndr
, h rgd fir
h uld  al   rr w a a l wr ra f inr
 Thi
advanag ay, h wvr  akn ff parially r c plly y incra
 in h
harh ldr
ri
k n acc un f pr viding r pr ci n  lndr


An hr a
pc f h financing c

i
i

u c

 A rgd fir i
al  raliz c n i
f
cal in fl ai n and ran
aci n c

rlad  an i

u f capial I

u c

ar
avd whn h rgd fir ak
a largr
curiy i

u

•


c

     

Tax Aspects of Merger and Acquisition Th ip ran ax pr vi
i n
rlaing  rgr and acqui
ii n can  r adly di
cu

d a
f ll w
: 1. Depreciation: F r ax purp

h dprciai n chargal y h aalgaad fir ha
  a
d

n h wrin d wn valu

f h a

 f r aalgaai n F r

acc uning purp

h wvr h dprciai n charg ay  a
d n h c n
idrai n paid f r h

G. Unabsorbed depreciation and Past losses of amalgamating firm: Una
rd dprciai n and pa
 l


f h aalgaaing fir cann   carrid f rward y h aalgaad fir xcp a
pr vidd in
ci n 72A (1) f h Inc  Tax Ac H wvr nal
h aalgaad fir 

carry

f rward accuulad l


and una
rd dprciai n f h aalgaaing fir in crain
pcial ca

f aalgaai n Th nfi i
availal whn h Cnral G vrnn i

ai
fid,

n h rc ndai n

f h
pcifid

auh riy ha h f ll wing c ndii n
ar fulfilld ë Th aalgaaing fir
h uld n   financially vial ë Th aalgaai n
h uld  in pulic inr


•


c

      ë Th aalgaai n
h uld facilia h rhailiai n r rvival f h u
in

f h aalgaaing c pany ë Th aalgaad fir
h uld g a crifica fr  h
pcifid auh riy ha adqua
p
hav n akn f r h rhailiai n r rvival f h u
in

f h aalgaaing fir

In viw f h nfi ha accru
undr
ci n 72A(1) h c ncrnd fir
h uld chck wih h
pcifid auh riy fairly arly in h aalgaai n pr c

whhr h nfi i
likly ccur

Sinc h nfi undr
ci n 72A(1) i
fn n  a
ily f rhc ing rging fir gnrally r
r  a rvr
 rgr In a rvr
 rgr, a l

aking fir acquir
a pr fi aking fir

·.Amortization of capital expenses: Th aalgaad fir can a riz h xpndiur n
cinific r
arch h xpndiur n acqui
ii n f pan righ
r c pyrigh
, prliinary xpn

and capial xpndiur n pr  i n f faily planning

•


c

      4

Investment

Allowance,

Development

Rebate

and

Development

Allowance: Inv
n all wanc, dvl pn ra and dvl pn all wanc raining una
rd in h hand
f h aalgaaing fir can  carrid f rward y h aalgaad fir pr vidd vari u
rquirn
rgarding
al r ran
fr f a

 and crai n and uilizai n f r
rv
ar
ai
fid y h aalgaad fir 5 Capital Gain Tax: N capial gain ax i
applical  h aalgaaing fir r i

harh ldr
if hy g
har in h aalgaad fir

•


c

     

Procedure for Takeover and Acquisition Public Announcement: T ak a pulic ann uncn an acquirr
hall f ll w h f ll wing pr cdur:

1.

Appointment of Merchant Banker:

Th acquirr
hall app in a rchan ankr rgi
rd a
cag ry ± I wih SEBI  advi
 hi n h acqui
ii n and  ak a pulic ann uncn f ffr n hi
half G.Use

of Media For Announcement:

•ulic ann uncn
hall  ad a la
 in n nai nal Engli
h daily n Hindi daily and n rgi nal languag daily nw
papr f ha plac whr h
har
f ha c pany ar li
d and radd ·. Timings of Announcement: •ulic ann uncn
h uld  ad wihin f ur day


f finalizai n

f

ng iai n
r nring in any agrn r  randu f undr
anding  acquir h
har
r h v ing righ


4. Contents of Announcement: •ulic ann uncn

f

ffr i
anda ry a
rquird undr h SEBI

Rgulai n
 •


c

     

Therefore, it is required that it should be prepared showing therein the following information: (1) •aid up
har capial f h arg c pany, h nur f fully paid up and parially paid up
har
 (2)T al nur and prcnag f
har
pr p
d   acquird fr  pulic
uc  iniu a

pcifid in h
u-rgulai n (1) f Rgulai n 21 ha i
: (a)Th pulic ffr f iniu 20% f v ing capial f h c pany  h
harh ldr
;

()Th pulic ffr y a raidr
hall n   l

han 10% u  r han 51% f
har
f v ing righ
 Addii nal
har
can  had @ 2% f v ing righ
in any yar

(3) Th iniu ffr pric f r ach fully paid up r parly paid up
har

(4) M d f payn f c n
idrai n;

(5) Th idniy f h acquirr and in ca
 h acquirr i
a c pany, h idniy f h pr  r
and, r h pr
n
having c nr l vr
uch c pany and h gr up, if any,  which h c pany l ng;

(6) Th xi
ing h lding, if any,

f h acquirr in h
har


f h arg

c pany, including h lding f pr
n
acing in c ncr wih hi; •
 

c

      (7) Salin faur
f h agrn, if any,
uch a
h da, h na f h
llr, h pric a which h
har
ar ing acquird, h annr f payn f h c n
idrai n and h nur and prcnag f
har
in r
pc Which h acquirr ha
nrd in

h agrn 

acquirr h
har


r h

c n
idrai n,  nary r hrwi
, f r h acqui
ii n f c nr l vr h arg c pany, a
h ca
 ay ;

(8) Th high
 and h avrag paid y h acquirr r pr
n
acing in c ncr wih hi f r acqui
ii n, if any, f
har
f h arg c pany ad y hi during h wlv  nh pri d pri r  h da f h pulic ann uncn

(9) Oc
and purp
 f h acqui
ii n f h
har
and h fuur plan
f h acquirr f r h arg c pany, including di
cl
r
whhr h acquirr pr p

 di
p
 f r hrwi
 ncur any a


f h arg c pany:

•r vidd ha whr h fuur plan
ar
 u, h pulic ann uncn
hall al

 u h w h acquirr
pr p
  ipln
uch fuur plan
;

(10) Th µ
pcifid da¶ a
ni nd in rgulai n 19

(11) Th da y which individual lr
f ffr w uld  p
d  ach f h
harh ldr


•
 

c

      (12) Th da f pning and cl
ur f h ffr and h annr in which and h da y which h accpanc

r rci n

f h

ffr w uld 

c unicad  h
har h ldr


(13) Th da y which h payn f c n
idrai n w uld  ad f r h
har
in r
pc f which h ffr ha
n accpd

(14) Di
cl
ur  rquird 

h ffc ha fir arrangn f r financial r
urc


ipln h

ffr i
alrady in plac, including h dail


rgarding h
urc
f h fund
whhr d 
ic i fr  ank
, financial in
iui n
, r hrwi
 r f rign i fr  N n-r
idn Indian
r hrwi


(15) •r vi
i n f r accpanc f h ffr y pr
n wh

wn h
har
u ar

n  h rgi
rd h ldr
f
uch
har


(16) Sau ry appr val
rquird 

aind f r h purp
 f acquiring h


har
undr h C pani
Ac, 1956, h M n p li
and R
riciv Trad •racic
Ac, 1973, and/ r any hr applical law


•


c

     

Purpose of Mergers and Acquisition Th purp
 f r an ffr r c pany f r acquiring an hr c pany
hall  rflcd in h c rp ra civ
 I ha
 dcid h
pcific civ
  achivd hr ugh acqui
ii n Th a
ic purp
 f rgr r u
in

c inai n i
 achiv fa
r gr wh f h c rp ra u
in

 Fa
r gr wh ay  had hr ugh pr duc ipr vn and c piiv p
ii n Ohr p

il purp

f r acqui
ii n ar
h r li
d l w: (1) Procurement of supplies: 1 
afguard h
urc f
uppli
f raw arial
r inrdiary pr duc; 2  ain c n i
f purcha
 in h f r f di
c un,
aving
in ran
p rai n c

, vrhad c

in uying dparn, c; 3 T
har h nfi
f
upplir
c n i
y
andardizing h arial
 (G)Revamping production facilities: 1  achiv c n i
f
cal y aalgaaing pr duci n facilii
hr ugh  r inn
iv uilizai n f plan and r
urc
; 2 
andardiz pr duc
pcificai n
, ipr vn f qualiy f pr duc, xpanding 3 ark and aiing a c n
ur

ai
faci n hr ugh
rnghning afr
al 4
rvic
; 5  ain ipr vd pr duci n chn l gy and kn w-h w fr  h ffr c pany 6  rduc c
, ipr v qualiy and pr duc c piiv pr duc
 rain and 7 Ipr v ark
har

•
 

c

      (·) Market expansion and strategy: 1  liina c pii n and pr c xi
ing ark; 2  ain a nw ark ul
in p



i n f h ffr; 3  ain nw pr duc f r divr
ificai n r
u
iui n f xi
ing pr duc
and  nhanc h pr duc rang; 4
rnghning rain ul
and
al h g d
 rai naliz di
riui n; 5  rduc advri
ing c
 and ipr v pulic iag f h ffr c pany; 6 Sragic c nr l f pan
and c pyrigh
 (4) Financial strength: 1  ipr v liquidiy and hav dirc acc

 ca
h r
urc; 2  di
p
 f
urplu
and udad a


f r ca
h u f c ind nrpri
; 3  nhanc garing capaciy,  rr w n r
rngh and h grar a


acking; 4  avail ax nfi
; 5  ipr v E•S (Earning pr Shar) (5) General gains: 1  ipr v i
wn iag and arac
upri r anagrial aln
 anag i
affair
; 2  ffr r
ai
faci n  c n
ur
r u
r
f h pr duc

(u) Own developmental plans: Th purp
 f acqui
ii n i
ackd y h dvl pnal plan


ffr r c pany¶


wn

•
 

c

      A c pany hink
in r
f acquiring h hr c pany nly whn i ha
arrivd a i
wn dvl pn plan  xpand i
prai n having xaind i
wn inrnal
rngh whr i igh n  hav any pr l f axai n, acc uning, valuai n, c I ha
 ai a
uial c inai n whr i c uld hav pp runii

uppln i
fund
y i

uanc f
curii
,
cur addii nal financial facilii
liina c pii n and
rnghn i
ark p
ii n (7) Strategic purpose: Th Acquirr C pany viw h rgr  achiv
ragic civ
hr ugh alrnaiv yp f c inai n
which ay  h riz nal, vrical, pr duc xpan
i n, ark xn
i nal r hr
pcifid unrlad civ
dpnding up n h c rp ra
ragi
 Thu
, vari u
yp
f c inai n
di
inc wih ach hr in naur ar ad pd  pur
u hi
civ lik vrical r h riz nal c inai n (8) Corporate friendliness: Alh ugh i i
rar u i i
ru ha u
in

h u

xhii dgr
f c praiv
piri d
pi c piivn

in pr viding r
cu
 ach hr fr  h
il ak vr
and culiva
iuai n
f c lla rai n

haring g dwill f ach hr  achiv prf ranc high
hr ugh u
in

c inai n
 Th c ining c rp ra ai a circular c inai n
y pur
uing hi
civ

•
 

c

     

Mergers and Acquisitions in India Th pr c



f rgr
and acqui
ii n
ha
gaind
u
anial ip ranc in

 day
c rp ra w rld Thi
pr c

i
xn
ivly u
d f r r
rucuring h u
in

rganizai n


In India, h c ncp f rgr
and acqui
ii n
wa
iniiad y h g vrnn  di
 S  wll kn wn financial

rganizai n
al


 k h nc

ary

iniiaiv
 r
rucur h c rp ra
c r f India y ad ping h rgr
and acqui
ii n
p lici


Th Indian c n ic rf r
inc 1991 ha
pnd up a wh l l  f challng
 h in h d 
ic and inrnai nal
phr
 Th incra
d c pii n in h gl al ark ha
pr pd h Indian c pani


g

f r rgr
and

acqui
ii n
a
an ip ran
ragic ch ic

Th rnd
f rgr
and acqui
ii n
in India hav changd vr h yar
 Th idia ffc
f h rgr
and acqui
ii n
hav al
n divr
 acr

h vari u

c r
f h Indian c n y India ha
rgd a


n

f h  p c unri
wih r
pc 

rgr and

acqui
ii n dal
 In 2007, h fir
 w  nh
al n acc und f r rgr and acqui
ii n dal
w rh $40 illi n in India

•
 

c

     

Mergers And Acquisitions Across Indian Sectors A ng h diffrn Indian
c r
ha hav r
rd  rgr
and acqui
ii n
in rcn i
, lc , financ, FMCG, c n
ruci n arial
, au  il indu
ry and
l indu
ry ar w rh ni ning

Wih h incra
ing nur f Indian c pani
ping f r rgr
and acqui
ii n
, India i
n w n f h lading nai n
in h w rld in r
f rgr
and acqui
ii n


Th rgr and acqui
ii n u
in

dal
in India a und  $40 illi n during h iniial 2  nh
in h yar 2007 Th  al 
iad valu f rgr
and acqui
ii n
in India f r 2007 wa
grar han $100 illi n I i
wic h a un f rgr
and acqui
ii n
in 2006

Mergers and Acquisitions in India: The Latest Trends Till rcn pa
, h incidnc f Indian nrprnur
acquiring f rign nrpri

wa
n 
c  n Th
iuai n ha
undrg n a
a chang in h la
 c upl f yar
Acqui
ii n f f rign c pani
y h Indian u
in


ha
n h la
 rnd in h Indian c rp ra
c r

Thr ar diffrn fac r
ha playd hir par
in faciliaing h rgr
and acqui
ii n
in India Fav ral g vrnn p lici
, u yancy in c n y, addii nal liquidiy in h c rp ra
c r, and dynaic aiud
f h Indian

•
 

c

      nrprnur
ar h ky fac r
hind h changing rnd


f rgr
and

acqui
ii n
in India Th Indian IT and ITES
c r
hav alrady pr vd hir p nial in h gl al ark Th hr Indian
c r
ar al
f ll wing h
a rnd Th incra
d paricipai n f h Indian c pani
in h gl al c rp ra
c r ha
furhr faciliad h rgr and acqui
ii n acivii
in India

Major Mergers and Acquisitions in India Rcnly h Indian c pani
hav undrakn
 ip ran acqui
ii n
 S  f h
 ar a
f ll w
:

; Hindalc acquird Canada a
d N vli
 Th dal inv lvd ran
aci n f $5,982 illi n ; Taa Sl acquird C ru
Gr up plc Th acqui
ii n dal a und  $12,000 illi n ; Dr Rddy
La
acquird Baphar hr ugh a dal w rh f $597 illi n ; Ranaxy La
acquird Trapia SA Th dal a und  $324 illi n ; Suzl n Enrgy acquird Han
n Gr up hr ugh a dal f $565 illi n ; Th acqui
ii n

f Daw

Elcr nic
C rp y Vid c n inv lvd

ran
aci n f $729 illi n ; H•CL acquird Knya •r lu Rfinry Ld Th dal a und  $500 illi n •
 

c

      ; VSNL

acquird

Tlgl 

hr ugh

a

dal

f

$239

illi n

Whn i c 
 rgr
and acqui
ii n
dal
in India, h  al nur wa
287 fr  h  nh

f January 

May in 2007 I ha
inv lvd

 nary ran
aci n f US $4737 illi n Ou f h
 287 rgr and acqui
ii n dal
, hr hav n 102 cr

c unry dal
wih a  al valuai n f US $2819 illi n

•
 

c

     

MERGER AND ACQUISITION LEGAL PROCEDURES OF COMPANIES:

1 M randu Of A

ciai n (MOA):-Th M randu f A

ciai n u
 pr vid h p wr  aalgaa in i
c
clau
 I M/A i

iln, andn in M/A u
 ak plac

2 B ard Ming:-A B ard Ming
hall  c nvnd  c n
idr and pa

h f ll wing rqui
i r
lui n
: - appr v h draf
ch f aalgaai n; -  auh riz filing f applicai n  h c ur f r dirci n
 c nvn a gnral ing; -  fil a pii n f r c nfirai n f
ch y h High C ur Thr ugh an applicai n undr
391/ 394 f C pani
Ac, 1956 can  ad y h r r crdi r f a c pany, h c ur ay n   al 
anci n h
ch which i
n  appr vd y h c pany y a B ard r r
r
lui n Dirc r
wh ar givn h nc

ary p wr
y h AOA ay pr
n a pii n n half f h c pany wih u fir
 aining h appr val f h c pany in gnral ing

3 Applicai n  h C ur: - An applicai n
hall  ad  h c ur f r dirci n
 c nvn a gnral ing y way f Judg

u n
(Form No. ··)
upp rd y an affidavi (Form No. ·4) Th pr p
d
ch aalgaai n

u




aachd




uch

f

affidavi

Th
u n

h uld  acc panid y: •
 

c

      -A crifid c py f h M&A f  h c pani
-A crifid ru c py

f h la
 audid B/S and •&L A/c

f Tran
fr

C pany Th applicai n  c nvn ing undr
c391 (1) i
rquird   ad  h r
pciv uri
dici nal HC y h c pany c ncrnd dpnding n h l cai n f i
rgi
rd ffic Siilarly an applicai n f r h
ch

f

arrangn will hav   ad  h c ncrnd HC whr h c pany¶
rgi
rd ffic i

iuad •r
n nild  apply:(i) U/
391 & 394, r
f h c pany hav righ  apply  c ur (ii) A
ucc

r  a
har f a dca
d r ha
in h n ral c ur
, l cu

andi  ainain an applicai n u/
391, 395 (iii) An applicai n can al
 ad y h ran
fr f
har
 (iv)Th crdi r al
hav righ  apply  c ur (v) Th liquida r i
al
p wrd  ak an applicai n  h c ur

4 C py  Rgi nal Dirc r:-A c py f applicai n ad  c ncrnd HC
hall al

n  h RD f h rgi n Alh ugh,
uch n ic i

upp
d  
n y h HC, u
ually h c pany
nd
i wih u waiing f r h HC 
nd i

5 Ordr Of High C ur(Orders in - Form No. ·5):-On haring

f h


u n
, h HC
hall pa

h nc

ary rdr
which
hall includ:

•
 

c

      (a) Ti and plac f h ing, () Chairan f h ing, (c) Fixing h qu ru, (d) •r cdur   f ll wd in h ing f r v ing y h pr xy, () Advri
n f n ic f h ing, (f) Ti lii f r h chairan 
ui h rp r  h c ur rgarding h r
ul f h ing Whr h c ur 
rv
ha any f h f ll wing circu
anc
xi
 in h ca
 f h rgr i ay n  rdr a ing whn
harh ldr
ar fw in nur; r whr h r
hip i
r
ricd  a
ingl faily, HUF r cl
 rlaiv
; r whr
harh lding parn f ran
fr r and ran
fr c pani
i
idnical

6 N ic Of Th Ming(Notice in - Form No. ·u):-Th n ic f h ing
hall 
n  h crdi r
and/ r all h
harh ldr
individually (including prfrnc
harh ldr
) y h chairan


app ind y rgi
rd p


ncl
ing: (a) A
an
ing f rh h f ll wing: - Tr
f aalgaai n and i
ffc
- Any arial inr

f h dirc r, MD
r Managr, in any capaciy - Effc f h arrangn n h
 inr

 () A c py f h pr p
d
ch f aalgaai n (c) A f r f pr xy,(Proxy in - Form No. ·7) (d) Andanc
lip,

•
 

c

      () N ic f h r
lui n f r auh rizing i

u f
har
 pr
n
hr han xi
ing
harh ldr
C puai n: Th n ic ha i
rquird   givn u/
393 f h Ac f r h ing f h r
/crdi r

hall  y 21 clar day
n ic

7 Advri
n f N ic Of Ming(Advertisement in - Form No. ·8):-Th n ic f h ing
hall  advri
d in an Engli
h and Hindi Nw
papr
a
h c ur ay dirc y giving n  l

han 21 clar day
n ic f r h da fixd f r h ing H wvr in
 in
anc
, h 21 day
pri d can  c nd nd if ra
n
ar f und u
ifial

8 N ic T S ck Exchang: - In ca
 f h li
d c pany, 3 c pi
f h n ic f h gnral ing al ng wih ncl
ur

hall 
n  h S ck Exchang whr h c pany i
li
d

9 Filing Of Affidavi F r Th C plianc: - An affidavi n  l
han 7 day
f r h ing
hall  fild y h Chairan f h ing wih h C ur
h wing ha h dirci n
rgarding h i

u f n ic
and advri
n hav n duly c plid wih

10 Gnral Ming:-Th Gnral Ming
hall  hld  pa

h f ll wing r
lui n
: (a) Appr ving h
ch f aalgaai n y ¾h a riy g if a ing i
andd y
ay 100 r
h lding 100
har
, h
ch
hall  dd •
 

c

      

hav n appr vd

nly whn i i

upp rd y a la
 51 r


h lding  ghr 750
har
a un
h
lv
; () Spcial R
lui n auh rizing all n f
har
 pr
n
hr han xi
ing
harh ldr
r an rdinary r
lui n  pa

d
uc  ging Cnral G vrnn
appr val f r h all n a
pr h pr vi
i n


f

Sci n 81(1A) f h C pani
Ac, 1956, (c) Th r
lui n  p wr dirc r
 di
p
 f h
har
n  akn up y h di

ning
harh ldr
a hir di
cri n, (d) An rdinary/
pcial r
lui n
hall  pa

d  incra
 h Auh rizd
har capial, if h pr p
d i

u f
har
xcd
h pr
n auh rizd capial Th dci
i n f h ing
hall  a
craind nly y aking a p ll n r
lui n
 In ca
 f Tran
fr c pany nd n   pa

a
pcial r
lui n f r ffring
har
 h pr
n
hr han h xi
ing
harh ldr


11 Rp ring f R
ul f h Ming(Report in - Form No. · ):-Th Chairan f h ing
hall rp r h r
ul f h ing  h c ur wihin h i fixd y h udg r wihin 7 day
, a
h ca
 ay  A c py f pr cding
f h ing
hall al

n  h c ncrnd S ck Exchang

12 F ralii
Wih ROC:- Th f ll wing d cun

hall  fild wih ROC al ng-wih h rqui
i filing f
:

•




c

      (i)F r N  23

f C pani
Gnral Rul
& F r
+ c py

f Spcial

R
lui n, (hr i
n nd f r h ran
fr r c pany  fil F r N  23 f h C pani
Gnral Rul
and F r
wih h Rgi
rar f C pani
) (ii)R
lui n appr ving h
ch f aalgaai n, (iii) Spcial r
lui n pa

d f r h i

u

f
har
 pr
n
hr han

xi
ing
harh ldr


13 •ii n (Petition in - Form No. 40):-F r appr val

f h
ch

f

aalgaai n, a pii n
hall  ad  h HC wihin 7 day
f h filing f rp r y h chairan If h Rgd Offic
f h c pani
ar in
a
a - hn  h h c pani
ay  v  inly  h High C ur If h Rgd Offic
f h c pani
ar in diffrn
a
- hn ach c pany
hall  v h pii n in r
pciv High C ur f r dirci n
 H wvr in a rcn udgn f Jaipur • lypin Ld v Raa
han Spinning & Waving Mill
, i wa
hld ha whn h w c pani
ar a diffrn plac
, hn n nd  fil an applicai n a w diffrn plac


14 Sanci n f Th Sch: - Th C ur
hall
anci n h
ch n ing
ai
fid ha: (i) Th wh l
ch i
annxd  h n ic f r c nvning ing (Thi
pr vi
i n i
anda ry in naur) (ii) Th
ch
h uld hav n appr vd y h c pany y an
f ¾h a riy f h r
pr
n •
 

c

      (iii)Th
ch
h uld  gnuin and  na fid and
h uld n   again
 h inr



f

h

crdi r
,

h

c pany

and

h

pulic

inr


Afr
ai
fying i
lf, h c ur
hall pa

rdr
in h rqui
i f r(Orders in Form No. 41) Th rquirn f law i
pri

i n r appr val f c ur  h
ch Th applicai n ad y h c pany i

k c ur¶
appr val  h c pany
ch f aalgaai n and n  rly rdring a ing Th c ur ay rdr a ing f r
  Th c ur u
 c n
idr all a
pc
f h ar
a
 arriv a a finding ha h
ch i
fair, u
 and ra
nal and d 
n  c nravn pulic p licy r any
au ry pr vi
i n Whil inrpring
394 r/w
391, w find ha h Triunal¶
p wr f rdring aalgaai n/rc n
ruci n i
liid y w pr vi

f
394: Fir
ly, Triunal ha
 awai h rcip

f rp r fr  h Rgi
rar

f C pani
a u h

annr in which affair


f h C pany ar c nducd Sc ndly, whn h

ran
fr r c pany i
pr p
d   di

lvd wih u winding up, h Triunal
hall awai

15 Sap Duy :A
ch
anci nd y h c ur i
an in
run lial 
ap duy

16 Filing wih ROC: Th f ll wing d cun

hall  fild wih ROC wihin 30 day
f rdr: -A crifid ru c py f C ur
Ordr •
 

c

      -F r N  21 f C pani
Gnral Rul
& F r


17 C py f Ordr   annxd: A c py f c ur
rdr
hall  annxd  vry c py f h M randu f A

ciai n i

ud afr h crifid c py f h rdr ha
n fild wih a
af r
aid

18 All n f
har
: A B ard R
lui n
hall  pa

d f r h all n f
har
 h
harh ldr
in xchang f
har
hld in h ran
fr r-c pany and  fix h rc rd da f r hi
purp


•
 

c

     

Conclusions Th f ll wing c nclu
i n
hav n drawn fr  h
udy: 1 •
- liralizai n, 
 Indian u
in

h u

ar undrg ing a r
rucural chang
, h lvl f r
rucuring aciviy i
incra
ing rapidly and h c n
lidai n
hr ugh M&A hav rachd vry c rp ra  ardr



2 M
 f h rgr
ha  k plac in India during h la
 dcad
d 

hav f ll wd h c n
qunc

f rgr
in India c rr  ra h

c nclu
i n
f r
arch w rk in US wih 
 f h M&A ar aking plac in India ipr v h
iz  wih
and inrnai nal c pii n which hy hav n xp
d  in h •
-liralizai n rgi

3 Th M&A aciviy i
undrakn wih h civ f financial r
rucuring and  avail f h nfi
f financial r
rucuring N waday
, f r financial r
rucuring, i ha
c  a pr-rqui
i ha c pani
nd  rg r acquir M r vr, financial r
rucuring c 
a
ir cau
 f M&A h
all c pani
cann  appr ach inrnai nal ark
wih u c ing ig i wih u rging r acquiring

4 Mark capialali
ai n f a c pany
i
i
f und   g ing up r d wn wih u any c rr
p nding chang in h EVA and MVA
inc h
 ck ay 
r ng cau
 f h gnral ulli
h
cnari in h ark¶
i

rvd in 
 f h ca

in ur
udy

•
 

c

     

BIBLIOGRAPHY B k
: - Mrgr, Acqui
ii n and c rp ra r
rucuring in India (Rachnaawa) Financial
rvic
3rd dii n (MYkhan)

W
i: -

wwwg

glc 

wwwwikipdiac  wwwrgr
indiac  wwwrgrdig
c 

•