Intellectual Property Issues in Pharmaceutical Industries in Merger and Acqisitin – A Critical Analysis

ABSTACT:

Intellectual property rights (IPR) have been defined as ideas, inventions, and creative expressions based on which
there is a public willingness to bestow the status of property. IPR provide certain exclusive rights to the inventors or
creators of that property, in order to enable them to reap commercial benefits from their creative efforts or
reputation. Pharmaceutical industry currently has an evolving IPR strategy requiring a better focus and approach in
the coming era. So in the Pharmaceutical companies, Merger and Acquisition take place because of many reasons
and which leads to distribution and transfer of shares.

Issues pertaining to M&A activity are not simply relegated to large, multinational corporations. Small and medium
size businesses can add significant value and revenue by exploiting the full potential of their valuable intangible
rights. In many instances, this means obtaining the necessary financing to acquire established properties and
intellectual property rights in order to expand their business or to simply improve their performance and
competitiveness. In the alternative, divesting certain intangible assets for a premium at the opportune time can yield
significant financial returns for small or medium size businesses. Finally, intellectual property rights have enabled
small or medium size businesses in relatively few years achieve large entity status with enormous capital values,
such as Microsoft and Sun Microsystems.
Introduction:

Mergers and Acquisitions (“M&A”) have become the corporate world’s most popular growth strategies, especially
in rapidly-evolving businesses like Information Technology, Telecommunication, Business Process Outsourcing and
Pharmaceuticals. This strategy now constitutes the swiftest, surest way to acquiring competencies and funds,
opening new market avenues, expanding customer base, snuffing out competition, and thus, maintaining and
improving profitability. The consensus is that when companies combine their core competencies through M&A,
both tangible and intangible assets of the Target Company are part of the cash flows to the Acquiring Company, and
the most significant of these assets is the Intellectual Property.1 Indeed, in today’s ‘idea economy’, where knowledge
is power, Intellectual Property (IP) has become the dactylogram of a company — the unique and continuing
identifier of a company and its creations of products and processes of art, literature, music, science and technology
through human endeavour.2

The world is caught in a frenzy to capture and harvest such assets, through Mergers (which give ownership over
assets) and Acquisitions (which give control over assets). Also, as IP-based deals have become more mainstream
and sophisticated, the willingness to divide and assume risk has increased. Companies and Investors are getting
more comfortable with IP financing. As a result of all of these trends, the rate of M&A transactions has increased
dramatically.

India's pharmaceutical sector has undergone unprecedented changes after the introduction of a system of product
patents with effect from 1st January, 2005. Before that, only patents for processes were permitted to be issued, a fact
that has been instrumental in the domestic industry's huge success as a worldwide exporter of high quality generic
drugs. The new patent regime has also led to the return of the pharmaceutical multinationals, many of which had left
India during the 1970s. Now they are back and looking at India not only for its traditional strengths in contract
manufacturing but also as a highly attractive location for research and development (R&D), particularly in the
conduct of clinical trials and other services.

A survey among Indian corporate managers in 2006 by Grant Thornton found that M&A’s are a significant form of
business strategy today for Indian corporate. The five main objectives behind any M&A’s transaction, for corporate
today were found to be:
1
Kelvin King, The Value of Intellectual Property, Intangible Assets And Goodwill, 7 JOURNAL OF INTELLECTUAL
PROPERTY RIGHTS 245 (2002).
2
According to a recent study by Price Waterhouse Coopers, more than 50% of companies’ net worth is derived
from IP, up from 15% in 1965 to 85% today. See P. Walsh, and G. Cohen, Liquidity in the IP Space- An Overview, 4
INTELLECTUAL ASSET MANAGEMENT 87(2007)
33% for improving revenues and
profitability.
• 28% for faster growth in scale
and quicker time to market.
• 22% for acquisitions of new
technology or competence.
• 11% for eliminate competition
and increase market share.
• 6% for tax shields and
investment savings.
- 33% for improving revenues and profitability.
- 28% for faster growth in scale and quicker time to market.
- 22% for acquisitions of new technology or competence.
- 11% for eliminate competition and increase market share.
- 6% for tax shields and investment savings. 3

I. But before moving to ‘how Intellectual Property process and fuels in Merger and Acquisition I
Pharmaceutical’, let’s first deal with the Basics of both – Intellectual Properties and Merger and
Acquisition:--

~ What is Intellectual property Right:

3
Grant Thornton India, (2006)The M&A and private equity scenario.
IP pertains to any original creation of the human intellect such as artistic, literary, technical, or scientific creation.
Intellectual property rights (IPR) refers to the legal rights given to the inventor or creator to protect his invention or
creation for a certain period of time. These legal rights confer an exclusive right to the inventor/creator or his
assignee to fully utilize his invention/creation for a given period of time.

Thus IPR, in this way aids the economic development of a country by promoting healthy competition and
encouraging industrial development and economic growth.

~ Basics of Merger and Acquisition of Company:

~ There are 4 basic forms of acquiring another firm—

1. Merger or consolidation
2. Acquiring stocks
3. Acquiring assets
4. Acquiring firms in a Total Cash Deal.

Merger
Merger is the one of the most common ways of acquiring another firm. A merger is the absorption of one company
by another company, including all its assets and liability.4 The firm which acquires retains its name and the firm
which is acquired is no more a separate legal entity and is a part of the former firm. A merger takes place when the
shareholders of both the firms agree to merge one with the other and to take the share of the surviving company in
consideration of their shareholding in the merging company. A merger extinguishes the merged corporation and the
surviving corporation assumes all the right, privileges, and liabilities of the merged corporation

Acquisition
While Merger is absorption of another firm, Acquisition is the purchase of another firm i.e., a one firm purchases
the other firm and a sale deed is executed. In acquisition only some or all of the assets and liabilities of other firm is
purchased or assumed. It deals with the purchase of shares of another company.

~ Kinds of Mergers:
Mergers can be grouped into 3 categories depending upon the nature and characteristics of the merging companies.

1. Horizontal Mergers
This denotes a merger of companies engaged in the same line of business, i.e., companies manufacturing,
producing, rendering or engaged in same kind of products or services.
2. Vertical Mergers

4
A. N. Sridhar, Strategic Financial Management for CA Final, (Shroff Publishers & Distributors pvt. Ltd.: Mumbai),
Ed 4th, p 1100.
 This denotes a merger of companies engaged in different stages of production in an industry, being
complementary to each other rather than on same line.
3. Diagonal
In a diagonal merger there is a merger of companies engaged in different mill falls under this category. This
type of merger is expected to bring about stability of income and profits and adverse fluctuations arising
out of trade cycles. Conglomerates are usually used as a way to smooth out wide fluctuations in earnings
and provide more consistency in long term growth.

II. Intellectual Property in Pharmaceutical Industries:

• 33% for improving revenues

and profitability.
• 28% for faster growth in scale
and quicker time to market.
• 22% for acquisitions of new
technology or competence.
• 11% for eliminate competition
and increase market share.
• 6% for tax shields and
investment savings.
• 33% for improving revenues
and profitability.
• 28% for faster growth in scale
and quicker time to market.
• 22% for acquisitions of new
technology or competence.
• 11% for eliminate competition
and increase market share.
• 6% for tax shields and
investment savings.
~ Role of Intellectual Property Rights in Pharmaceutical Companies:

More than any other technological area, drugs and pharmaceuticals match the description of globalization and need
to have a strong IP system most closely. Knowing that the cost of introducing a new drug into the market may cost a
company anywhere between $ 300 million to $1000 million along with all the associated risks at the developmental
stage, no company will like to risk its IP becoming a public property without adequate returns. Creating, obtaining,
protecting, and managing IP must become a corporate activity in the same manner as the raising of resources and
funds. The knowledge revolution, which we are sure to witness, will demand a special pedestal for IP and treatment
in the overall decision-making process.[17]

Competition in the global pharmaceutical industry is driven by scientific knowledge rather than manufacturing
know-how and a company's success will be largely dependent on its R&D efforts. Therefore, investments in R&D in
the drug industry are very high as a percentage of total sales; reports suggest that it could be as much as 15% of the
sale. One of the key issues in this industry is the management of innovative risks while one strives to gain a
competitive advantage over rival organizations. There is high cost attached to the risk of failure in pharmaceutical
R&D with the development of potential medicines that are unable to meet the stringent safety standards, being
terminated, sometimes after many years of investment. For those medicines that do clear development hurdles, it
takes about 8-10 years from the date when the compound was first synthesized. As product patents emerge as the
main tools for protecting IP, the drug companies will have to shift their focus of R&D from development of new
processes for producing known drugs towards development of a new drug molecule and new chemical entity (NCE).
During the 1980s, after a period of successfully treating many diseases of short-term duration, the R&D focus
shifted to long duration (chronic) diseases. While looking for the global market, one has to ensure that requirements
different regulatory authorities must be satisfied.[18]

It is understood that the documents to be submitted to regulatory authorities have almost tripled in the last ten years.
In addition, regulatory authorities now take much longer to approve a new drug. Consequently, the period of patent
protection is reduced, resulting in the need of putting in extra efforts to earn enough profits. The situation may be
more severe in the case of drugs developed through the biotechnology route especially those involving utilization of
genes. It is likely that the industrialized world would soon start canvassing for longer protection for drugs. It is also
possible that many governments would exercise more and more price control to meet public goals. This would on
one hand emphasize the need for reduced cost of drug development, production, and marketing, and on the other
hand, necessitate planning for lower profit margins so as to recover costs over a longer period. It is thus obvious that
the drug industry has to wade through many conflicting requirements. Many different strategies have been evolved
during the last 10 to 15 years for cost containment and trade advantage. Some of these are out sourcing of R&D
activity, forming R&D partnerships and establishing strategic alliances. 5

Innovation has a dramatic impact on the pharma industry. As the rewards for success of innovation are high, the risk
of failures can threaten company’s survival. The pharma companies have to keep pace with innovation that creates
significant impact on millions of lives and the bottom line of a company. Companies are using innovation to propel
growth and deliver tangible results. Managing innovation in the pharma industry helps companies to broaden their
drug discovery and generate higher returns on investment.

Developing a medication costs billions of dollars and requires a huge investment in research and development. The
return on effective innovations are huge—thus helping to gain a competitive edge in the market. As the stakes
involved in the pharma industry are high, companies are spending a significantly higher portion of revenues on not
only innovations, but developing an innovation strategy for the development and marketing of new drugs.
Innovation is synonymous with drug discovery and approval.

According to industry estimates, the large pharma companies are now spending USD $5 billion for approved
molecules. Smaller companies, on the other hand, tend to spend less.

Intellectual Property Rights

These innovations lead to discovery of new life-saving drugs and have to be protected through intellectual property
rights (IPRs). Patents provide pharma companies exclusive rights to market drugs and prevent others to
manufacture, sell, and make these drugs for a period of 20 years. IPR is a prerequisite for pharma companies for
identification, planning, commercialization, and protection of invention. It is also an important tool to protect

5
Mrudula BS, Durgadevi NK, Madhavi BR, Tejeswi B, Durga PV. Intellectual property rights pinpoint at
IPR spotlights coveted R and D. Drug Inv Today. 2009;2:197–201.
investment, time, and effort and encourages healthy competition—thus promoting industrial development and
economic growth. IPRs also provide incentives to pharma companies to invest in research and development.

The IPR protection works in numerous ways:

1. Provides fair and effective incentive for innovation

2. Protects pharma companies against potential infringers

3. Provides strong enforcement tools for defending infringed patents

In a weak IPR protection economy, generic drug manufacturers imitate biopharmaceutical innovations without
investing time and money to develop new medicines. As a result, branded drug manufacturers are unable to recoup
investments in new drug development, thus finding it difficult to invest in research and development (R&D) of new
drugs and costly diseases.

A stronger IPR regime is aids pharma companies in protecting innovation from the research to development stage.
Creating, managing, and protecting intellectual property are becoming an important source of raising funds required
for investment in R&D. IPRs also play a crucial role in mergers and acquisitions of the target SME and are
independent commodities that can be traded by way of licensing, joint ventures, etc.

IPR has a significant impact in the pharma industry from issues ranging from discovering, developing to pricing,
distribution, competition mapping, availability, and pricing of new medicines. With stronger IPR protection in
developed countries, the pharma companies are growing at a rapid rate. On the flip side, developing countries
criticize patent system as it creates monopoly in the market and leads to higher prices of drugs.

III. IP ISSUES IN MERGER AND ACQUISITION-

 The following are the IP Issues in merger and acquisition:--

- IP due diligence- IP due diligence is an audit that is conducted to assess the quantity and the quality of
intellectual property assets owned by, or licensed to, a company, business or individual. It includes an
assessment of how intellectual property is actually captured and protected by the relevant business.
- Ip due diligence creates an issue due to a poor structure or a wrongly applied business strategy.  Due
diligence procedure should identify potential risks that can be posed, what can harm the inherent interests
of the parties to the contract.
- Non-disclosure agreement- to protect the interests of the parties, it is important to enter into a non-
disclosure agreement in case something goes wrong. The thing which is to be protected is the secrets of the
parties that can’t be disclosed to any outsider.

It includes the following aspects-

 the information must not be readily accessible for people.

  it should be secret.
 the owner should protect information from leakage.
- IP documentation The IP documents should very well include the following points which are drafted
in a proper manner-

 Definitions of Transferred IP.

 Licenses and Assignment.
 Transition Licenses.
 Transition Service Agreements.
 Representations and Warranties.
 Allocation of IP Risk.
 Indemnification.
 Integration of Acquired IP with the Existing IP Portfolio.
 Further Assurances.
- Data Protection and privacy issues

The seller should conform to the acquirer that he has proper policies, practices, privacy issues and security for data
protection. He should also include in the acquisition agreement specific representations and warranties relating to
the seller’s compliance with data protection and privacy laws. He should also confirm that the seller has internal
plans and procedures with regard to a security breach.

- IP valuation

IP has to be measured in its most effective way as it is an intangible asset and a variety of factors has to be seen for
its valuation such as new technologies, market share, profits earned, industry type, barriers to entry in that industry,
expansion, legal protection, data breach, consumers type, etc.

- Transfer of Technology

High standards of technology have to be maintained because of a new occurrence in technology with the efflux of
time. New technology will help to reduce the costs and create other valuable benefits also.

The transfer of technology has to be done in the most effective manner as it deals with-

  know-how, know- what or know-who.

  negotiation terms of the acquisition.
 Identification of attractive technologies.
 Assessment and consideration of the terms of the acquisition.
 IV. How Transfer took place in Merger and Acquisition :--

~ Valuation of Intellectual Property Rights—

As such there is no standard formula for the valuation of intellectual trademark, patent and copyright. However,
various factors have to be taken into consideration before valuation of such property:

1. extent of statutory protection that the IPR enjoy;

2. Value of each IPR (when viewed as a whole and separately);
3. Level of risk related to the IPR such as, infringement od third party rights, or infringement of IPRs by others.

There are various approaches to valuation like cost approach, income approach, market approach etc.

~ Transfer of Intellectual Property

When the intellectual property assets are owned by the transferor company, such assets are transferred to the
transferee company under the scheme of merger. A relevant sample clause of the scheme transferring assets owned
by the transferor company in favor of the transferee company including intellectual property assets would be
generally worded as follows:-

‘‘ Upon the coming into effect of this scheme and with effect from the Appointed Date, the transferor company shall
stand amalgamated with the transferee company, as provided in the scheme, and, pursuant to the provisions of
Section 391 and 394 and other applicable provisions of the act, all the assets and debts, outstandings, credits,
liabilities, duties and obligation whatsoever concerning the Transferor Company, including the intellectual property
assets but not limited to the entire undertaking of the transferor Company stand transferred to and vested in and/ or
be deemed to and stand transferred to an vested in the Transferee Company as under’’.

- Transfer of Trademarks

Being a species of property, a right in a trademark is transferable as any other right in property. Thus, a trademark
along with all the other assets of the transferor company are transferred under the scheme of merger framed under
Section 394 of the Companies Act, 1956.

- Transfer of Copyrights

When the transferor company holds copyright in respect of a work, the same along with other assets shall stand
transferred to the transferee company under the scheme of the merger. Where the copyright in respect of the work is
registered with the Registrar of Copyrights, the transferee company shall be required to make an application to the
Registrar for registration of its title.
 - Transfer of Patents

The patents held by the transferor company along with the other assets shall be transferred to the transferee company
under the scheme of merger. The transferee in such a case would be required to apply to the Controller of Patents, in
writing, for the registration of its title.

Thus, the transfer of IPR is transferable as any other property with certain formalities.

~TRANSFER OF INTELLECTUAL PROPERTY IN ACQUISITION

Intellectual property owned by target company.

In case of an acquisition, particularly a 100 percent acquisition by way of purchase of shares of the target company,
the acquirer would generally have the right to use the existing IPRs, such as trademarks or the corporate name etc.
since the trademarks are owned by the target company itself.

How IP Valuation is Crucial to M&A Activity:-

The cinching of any Merger or Acquisition involves three phases:

1. Pre-acquisition;

2. The Deal;

3. Integration;
and all the steps to be undertaken are mainly aimed at preserving, leveraging and harvesting of the Intellectual
Property at stake.

Considering that a vast proportion of the value of a business may relate to intellectual property rights, probably the
first thing that should be determined by an Acquiring Firm is the assessment of its IP assets in order to protect the
value of those rights. Research has persistently shown that intellectual asset value is not fully understood by
businesses – even those whose value is heavily dependent on their IP.6
The negotiation of the final Purchase Price between the seller and buyer can only occur after the credibility of real
worth of the target company has been established, through valuation which takes into account the business dynamics
of both parties, the rationale for the Merger, industry dynamics, and net likely profits and losses from the synergy.
Valuation provides vital information about the economic viability of the acquisition and indicates the levels of

6
A survey by DLA Piper in 2004 of IP-owning businesses found that 38% had never undertaken a formal valuation
of their intellectual property. See How Europe Manages its IP, MANAGING INTELLECTUAL PROPERTY, Nov. 8 2004,
http://www.managingip.com/Article/1258627/How-Europe-manages-itsIP.html
present and potential utilization of intellectual property, so that the Acquiring Firm may frame its business
development strategies accordingly.

The valuation is based on dynamic expectations and a dynamic environment, where economic cycles (like changing
GDP Growth Rates), stock-market situations and global situations (like wars or terrorism) play havoc with corporate
stabilities.7The value of intellectual property is even more volatile. As the value of assets depends on the present
value of the future economic benefits or losses that can be reasonably anticipated to accrue to the owner, valuation
may yield only relative results. Government Policies, market scenarios, internal work efficiency of corporations,
antitrust laws and the impact of globalization also make these Intangible Assets difficult to identify and evaluate.
However, valuation which is based on careful analysis, experience, professional knowledge, expert advice and keen
diligence may well produce near infallible answers. Valuation is an art more than a science and is an
interdisciplinary study drawing upon law, economics, finance, accounting, and investment. Such a multidisciplinary
investigation for assessment and valuation of the assets by the legal and financial professionals along with the IP-
owner is called the “Due Diligence Report”.

How is Due Diligence Valuation carried out?

Due Diligence valuation of IP is crucial to the transaction due to the disparity of information (about net assets value)
between the seller and the buyer.8 It starts with a Letter of Intent or a Memorandum of Understanding, in which the
parties agree to exchange requisite information, documents, business plans, stipulating the schedule, mode and
deadlines. A Confidentiality Agreement may be contracted if the IP involves certain trade secrets, protecting
Attorney-Client privileges.9

The Rule of the Thumb is first employed to determine the importance of Intellectual Property of the Target Firm. 10

Subsequently, Due Diligence must quantify the remaining useful life— physical, functional, technological,
economic and legal— and decay rates of the IP using 3 possible techniques of the mathematical valuation of
Intellectual Property:

7
T. COPELAND ET AL., VALUATION: MEASURING AND MANAGING THE VALUE OF COMPANIES 128-131 (John Wiley
& Sons 2000).
8
D. McGavock and M. Newell , Five Critical Questions Your CFO Should Be Asking About IP, 4 INTELLECTUAL ASSET
MANAGEMENT 76, 80 (2007).
9
GLENN A. GUNDERSON AND PAUL KAVANAUGH, INTELLECTUAL PROPERTY IN MERGERS & ACQUISITIONS,
TRADEMARKS IN BUSINESS TRANSACTIONS FORUM 87 (International Trademark Association 1999)
10
The greater the disparity between the Purchase Price proposed by the seller and the value of the Net Tangible
Assets, the greater is the value of the Intellectual Property owned by the seller. A. Lanjouw, J. Pakes and J. Putnam,
How to Count Intellectual Property and Value Intellectual Property: The Use of Patent Renewal and Application
Data, 46 JOURNAL OF INDUSTRIAL ECONOMICS 405, 409 (1998). See also Ted Hagelin, Valuation of Patent
Licenses, 12 TEXAS INTELLECTUAL PROPERTY LAW JOURNAL 423 (2004).
1. Market-Based Value, i.e. the purchase price determined by market price of a comparable property. This
valuation technique is impeded by several factors, such as difficulties of finding property of comparable and
compatible value to the IP in hold, special purchasers, different negotiating skills, and the distorting effects of the
peaks and troughs of economic cycles etc. 20
2. Cost-Based Value, i.e. the purchase price determined by the cost to create or the cost to replace. Though this
valuation-technique is easy in use, it ignores changes in the time value of money and ignores maintenance. As this
method takes into account the cost for building up the business from scratch, it is more suitable in cases of
buildoperate-transfer deals.11
3. Value Based on Estimates of Future Economic Benefits, i.e. the purchase price determined from an estimate of
past and future economic benefits, called the “Discounted Cash Flow” Analysis of:
1) capitalisation of historic profits,
2) gross profit differential methods,
3) excess profits methods, and
4) the relief from royalty.
This technique takes into consideration the future earnings of the business and hence the appropriate value depends
on historic and potential profitability of assets, projected revenues and costs in future, margin between the branded
and the generic equivalents of a product, expected capital outflows, investment prospects, number of years of
projection, discounting rate and terminal value of business.

Any of these methods may be used in Due Diligence to measure the real value of IP being used or required to be
used in future, examining legal touchstones like:
 The substantive type of IP assets (whether owned, registered, applied for, licensed, etc.);
 The chain of ownership and control in IP usage (such as invention, purchase, assignment, acquisition);
 Interests of any third parties in IP (such as rights infringed);
 tax considerations (maintenance fees, tax payments and benefits);
 Validity and viability of rights to the IP (whether rights are transferable, lawful, enforceable);
 Modus operandi of IP transfer (schedule and medium of cash flow, etc);
 Geographical area of the IP usage (market access, target group, etc.);
 Impact of foreign laws on IP transfer and usage (like jurisdictional issues);
 Obstructions to the use of IP (competitors’ dominating assets, fees, defects in IP, unsafe employment
agreements etc.);
 Need of warranties and recordal of IP rights;
 Past and potential violations of Antitrust Laws; and
 Disputes related to that IP (infringement-issues, pending applications for patents, etc.). 12

11
H. Harish and C. Srividya, Rationale and Valuation Techniques for Mergers and Acquisitions, THE CHARTERED
ACCOUNTANT, May 2004, 1228-1230
12
Arnold B. Silverman , The Importance of Intellectual Property Due Diligence in Mergers and Acquisitions, 56 JOM
76 (2004).
III. INTELLECTUAL PROPERTY – THE WINNER’S CURSE The Risks of Unsound Due Diligence In
Mergers and Acquisitions, Intellectual Property Assets can be especially difficult to accurately value, most notably
in rapidly evolving hightech industries. Failure to execute a sound IP Due Diligence Report has been the Waterloo
of many an Acquiring Company. Indeed, the most oft cited cause for M&A failure is intellectual property, in a
notorious phenomenon known as the “Winner’s Curse” where the Acquiring Firm pays more than market value for
an item due to systematically under-estimating their own costs (i.e. over-estimating their own values), and later feels
remorse that so much was paid. The curse is common and potentially ruinous.13 Persons suffering may be punished
by capital markets, hamstrung competitively and constrained by burdensome capital structures. They may also get
caught in tedious, expensive IP litigation, and contentious antitrust or jurisdictional issues

Intellectual Property and Jurisdiction Issues

The Acquiring Firm often uses the Intellectual Property Asset in more than one country. Laws governing IP in
parent country of the Acquiring Firm, are usually different from the IP Laws in the host country of the Target
Company. Such IP assets become victim to multiple foreign jurisdictions. The Courts have to deal with issues on the
basis of the merit of IP alone.

Intellectual Property Conflicting with Antitrust Laws

Most Antitrust Laws prohibit M&A Activities which cause ‘substantial’ lessening of competition or which show
tendencies towards monopoly in any relevant market.52 Many a time, Merger guidelines have evolved to
circumvent anti-competition activities, but though they have been influential, they have not been binding on
Courts.53 Antitrust issues are more virulent in case of Horizontal Mergers, where firms competing in the same
market combine.

13
M. PARK, MAKING M&A PAY: AVOIDING THE WINNER’S CURSE, CORPORATE STRATEGY (Accenture 2005)
CONCLUSION

After discussing the concept of Mergers & Acquisitions in detail we come to a conclusion that in order to sustain in
the industry it is not only essential to run a business efficiently but to merge and acquire with other businesses as
well. It is the need of the hour today. Specially in India, where so many private industries are coming up post 1991,
it is a challenge to sustain one’s business in the market. Here, Darwin’s theory of the survival of the fittest is
absolutely applicable.