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Mergers & Acquisition have become very popular throughout the world in the recent times.
This has become popular due to globalization, liberalization, technological developments &
intensely competitive business environment. Mergers and acquisition are a big part of
corporate finance world. This process is extensively used for restructuring the business
organization. In India, the concept of mergers and acquisition was initiated by the
government bodies. The Indian economic reform since 1991 has opened up a whole lot of
challenges both in the domestic and international spheres. The increased competition in the
global market has prompted the Indian companies to go for mergers and acquisitions as an
important strategic choice. The trends of mergers and acquisitions in India have changed
over the years. The immediate effects of the mergers and acquisitions have also been
diverse across the various sectors of the Indian economy.Ê

xut the interesting point here is that upwards of 60% of these mergers fail to deliver on
share holder expectations.Ê

The reasonable and prudent question then becomes why these mergers fail to deliver on the
promised or projected results. Ê
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The phrase "Mergers & Acquisition" refers to the aspect of corporate strategy, corporate
finance and management dealing with the buying, selling and combination of different
company that can assist, finance or help a growing company in a given industry, grow
swiftly without having to create another business entity.Ê

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M&A has become a daily transaction now-a-days. Mergers and acquisitions are vital part of
capital market activity in restructuring a corporation and had lately become one of the
preferential routes for expansion and consolidation. The reasons to merge, amalgamate and
acquire are diverse, ranging from acquiring market share to restructuring the corporation to
mount up global competition. One of the largest and most complicated parts of a business
merger is the successful integration of the enterprise networks of the merger partners. The
main objective of each firm is to gain profits. M&A has a great scope in sectors like steel,
aluminum, cement, auto, banking & finance, computer software, pharmaceuticals, consumer
durable food products, textiles etc.Ê

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ëvery merger, acquisition, or strategic alliance promises to create value from some kind of
synergy, yet statistics show that the benefits that look so good on paper often do not
materialize. Unfortunately, many mergers and acquisitions fail to meet their objectives,
which are typically to accelerate growth, cut costs, increase market share or take advantage
of other synergies.Ê

In simple way I can say that "Merger & Acquisition is just like a marriage, interesting point
here is that upwards of 60% of these mergers fail to deliver on share holder expectations.
xut when M&As succeed, they can lay the foundation for a company to be the leader in its
sector."Ê
The logical and sensible issue then becomes why these mergers fail to deliver on the
promised or projected results. The answer often times is quite simple; it is a direct result of
the amalgamation process not being carefully thought with respect to the indirect impacts of
changing a business unit. The mindset here is often that when company A buys company x
that they rush in to change all policies and procedures to more closely meet their business
model. At face value that would appear to be the intelligent course of action however little
thought is given to what they are about to change and the implications that follow.Ê

D#  #!'() !$Ê

It is accounted that one of the major causes for malfunction of a merger or acquisition is
based on Human Resources disregard. People issues have been the most perceptive but
often ignored issues in a merger and acquisition. When a conclusion is taken to merge or
acquire, a company analyses the feasibility on the business, financial and legal fronts, but
fails to recognize the importance attached to the human resources of the organizations
involved. Companies which have failed to distinguish the importance of human resources in
their organizations and their function in the sensation of incorporation have failed to achieve
success. While it is fact that some of these failures can be largely attributed to financial and
market factors, many studies are pointing to the overlook of human resources issues as the
chief reason for M&A failures.Ê

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Mergers & Acquisitions (M&A) has developed into the mainly vital strategic element driving
business growth and intensity. Mergers and acquisitions will continue to be an ever-present
attribute of the current corporate landscape. Merger and acquisition (M&A) hold uniformly
diverse sets of people, processes and technologies with the common aim of creating a
larger, unified organization. The organization aims to benefit from the synergies of mixing
organizations by consolidation, rationalization and incorporation of the people, processes
and technologies of both organizations. Human Resources (HR) has the potential to play an
important role during all stages of M&A. However, these issues are rarely considered until
serious difficulties arise. The Human Resource aspect of M&A should be accorded the same
emphasis and thought given financial, legal, operational and strategic concerns. HR no
longer plays a hidden role and is emerging as a strategic business associate where key
initiatives undertaken such as communication, training, counseling, career planning, support
workshops, building trust, coaching and compensation planning, have significant business
impact.Ê