Mergers and Acquisitions: IS IT RIGHT STRATEGIC MOVE FOR BUSINESS?

Submitted By NTOI LAKHVIR SINGH MANDEEP SINGH MANINDER KAUR

CONTENTS

Definition

Types
Successful Mergers Failed Mergers

Definition
Merger : is a corporate strategy of combining different companies into a single company to enhance the financial and operational strengths of both organizations

Acquisition: refers to the takeover or buyout of the target companies ownership stakes so that it can have control of the target firm

Types

SUCCESSFUL MERGERS & ACQUISITIONS

About HUTCH

Hutchison Whampoa company 1994

and its Max Group, established a

Later in 2000 Essar acquired its 33% share

In 2003 its ad campaign of a pug following a boy become a great hit. In February 2007, Hutchison Telecom announced agreement with a Vodafone Group to sell 67% shares for $11.1 billion. Later in 2011 Vodafone Group buys out its partner Essar for $5.46 billion

About VODAFONE

Vodafone Group is a British telecommunications company

multinational

It has headquartered in London, United Kingdom.

It is worlds second largest telecommunication company in the world.

Why Merged?

Vodafone wanted to expand into the Asian markets.

Hutch was Fourth largest mobile operator in India with 24.41million subscribers Hutch wanted to sell mutual distrust.
Li Ka-Shing thought it the right time to quit Indian operations to finance other operations.

Synergies

Vodafone gets access to the fastest growing mobile phone market in the world India is key to Vodafone strengthening its presence in Asia. Hutchison-Essar became one of the better-run companies with higher average revenue per subscribers. 3G is set to take off in India, allowing data and video cellular networks.

About Wrigley

It is an American company headquartered in the Wrigley Building in Chicago, Illinois. The company was founded on April 1, 1891 The Wm. Wrigley Jr. Company is a recognized leader in confections with a wide range of product

The Company has global sales of $5.4 billion and distributes its worldfamous brands in more than 180 countries.
On April 28, 2008, it announced that Mars, Inc would acquire Wrigley for approximately $23 billion

About MARS

Mars, Incorporated is a family owned company It produces world's leading confectionery, food and petcare products and has growing beverage and health & nutrition businesses. It has its headquartered in McLean, Virginia Mars, Incorporated operates in more than 66 countries and employs more than 48,000 associates worldwide. The company's global sales are $22 billion annually.

Reasons for Acquisition

To create the worlds biggest candy maker It would surpass its rivals, which include Hersheys and Cadbury in the candies segment It would expand Mars Global reach as Wrigley generates 70% of its sales outside of the US The deal would expand the product basket of Mars The combination will allow them to invest long term and grow their business.

COPERATE MARRIAGES THAT

About AOL

AOL was founded in 1985 under the name Quantum Computer Systems

It is a firm providing content and services to residential customers via dial-up modems. At the time of the merger, AOL had 27 million subscribers
In 2001, Time Warner consolidated with American Online (AOL) for $111 billion

About TIME WARNER

It is an American multinational media corporation

It has headquarters in New York City.

It is combination of two companies Time and Warner Brothers It has major operations in film ,television and publishing

Reasons For Merger

Changing environment: Time Warner intends to combine its media contents with the Internet Better Services: AOL needed a strategy for moving its customers forward into the world of high-speed

Reasons For FAILURE

Overvalued shares of AOL Lack to recognize new trends

About Air Deccan

It is a low cost subsidiary of Deccan Aviation. It was started by Captain G R Gopinath. The company operates only on domestic routes in India.

In August 2008, Air Deccan has merged with another Indian airline, Kingfisher Airlines for Rs.550 crores.

About Kingfisher

Kingfisher Airlines, through its parent company United Breweries Group. The airline started commercial operations in 9 May 2005 . Kingfisher Airlines serves 25 domestic destinations within India .

Why Merged?

Kingfishers merged with Air Deccan to get entity rights to fly international. Any Indian airline requires five years of domestic flying experience and a fleet of 20 aircraft to get permission to fly international. Kingfisher Airlines was only two years old in 2007, when it acquired over four-year-old Air Deccan.

Why Failed?

There is no proper planning and implementation. After the acquisitions the airlines ventured into the low-cost segment, which they had never done before Different working culture

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