Explain with examples various types of synergies recognized by the efficiency theory

Synergy
A Synergy is any impact that builds the worth of a blended firm over the consolidated
worth of the two separate firms. Synergy might emerge in M&A exchanges for quite
some time, for example, cost reserve funds because of functional efficiencies or
income potential gain because of more useful utilization of resources. The following
are types of synergies:
1. Manufacturing Synergy
2. Operations Synergy
3. Marketing
4. Financial
5. Tax Synergy
What are the RBI regulations relating to remittance of foreign Exchange for cross
border acquisitions (explain recent regulations/updated regulations)?
In an inbound merger,
(1) the resultant company may issue or transfer any security and/or a foreign
security, as the case may be, to a person resident outside India in accordance with
the pricing guidelines, entry routes, sectoral caps, attendant conditions and reporting
requirements for foreign investment as laid down in Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017.
Provided that
where the foreign company is a joint venture (JV)/ wholly owned subsidiary (WOS) of
the Indian company, it shall comply with the conditions prescribed for transfer of
shares of such JV/ WOS by the Indian party as laid down in Foreign Exchange
Management (Transfer or issue of any foreign security) Regulations, 2004; where the
inbound merger of the JV/WOS results into acquisition of the Step down subsidiary
of JV/ WOS of the Indian party by the resultant company, then such acquisition
should be in compliance with Regulation 6 and 7 of Foreign Exchange Management
(Transfer or issue of any foreign security) Regulations, 2004.
(2) An office outside India of the foreign company, pursuant to the sanction of the
Scheme of cross border merger shall be deemed to be the branch/office outside
India of the resultant company in accordance with the Foreign Exchange
Management (Foreign Currency Account by a person resident in India) Regulations,
2015. Accordingly, the resultant company may undertake any transaction as
permitted to a branch/office under the aforesaid Regulations.
(3) The guarantees or outstanding borrowings of the foreign company from overseas
sources which become the borrowing of the resultant company or any borrowing
from overseas sources entering into the books of resultant company shall conform,
within a period of two years, to the External Commercial Borrowing norms or Trade
Credit norms or other foreign borrowing norms, as laid down under Foreign
Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations,
2000 or Foreign Exchange Management (Borrowing or Lending in Rupees)
Regulations, 2000 or Foreign Exchange Management (Guarantee) Regulations, 2000,
as applicable.
Provided that no remittance for repayment of such liability is made from India within
such period of two years;
Provided further that the conditions with respect to end use shall not apply.
(4) The resultant company may acquire and hold any asset outside India which an
Indian company is permitted to acquire under the provisions of the Act, rules or
regulations framed thereunder. Such assets can be transferred in any manner for
undertaking a transaction permissible under the Act or rules or regulations framed
thereunder.
(5) Where the asset or security outside India is not permitted to be acquired or held
by the resultant company under the Act, rules or regulations, the resultant company
shall sell such asset or security within a period of two years from the date of sanction
of the Scheme by NCLT and the sale proceeds shall be repatriated to India
immediately through banking channels. Where any liability outside India is not
permitted to be held by the resultant company, the same may be extinguished from
the sale proceeds of such overseas assets within the period of two years.
(6) The resultant company may open a bank account in foreign currency in the
overseas jurisdiction for the purpose of putting through transactions incidental to
the cross border merger for a maximum period of two years from the date of
sanction of the Scheme by NCLT.
5. Outbound merger
In an outbound merger,
(1) a person resident in India may acquire or hold securities of the resultant company
in accordance with the Foreign Exchange Management (Transfer or issue of any
Foreign Security) Regulations, 2004.
(2) a resident individual may acquire securities outside India provided that the fair
market value of such securities is within the limits prescribed under the Liberalized
Remittance Scheme laid down in the Act or rules or regulations framed thereunder.
(3) An office in India of the Indian company, pursuant to sanction of the Scheme of
cross border merger, may be deemed to be a branch office in India of the resultant
company in accordance with the Foreign Exchange Management (Establishment in
India of a branch office or a liaison office or a project office or any other place of
business) Regulations, 2016. Accordingly, the resultant company may undertake any
transaction as permitted to a branch office under the aforesaid Regulations.
(4) The guarantees or outstanding borrowings of the Indian company which become
the liabilities of the resultant company shall be repaid as per the Scheme sanctioned
by the NCLT in terms of the Companies (Compromises, Arrangement or
Amalgamation) Rules, 2016.

Provided that the resultant company shall not acquire any liability payable towards a
lender in India in Rupees which is not in conformity with the Act or rules or
regulations framed thereunder.
Provided further that a no-objection certificate to this effect should be obtained
from the lenders in India of the Indian company.
(5) The resultant company may acquire and hold any asset in India which a foreign
company is permitted to acquire under the provisions of the Act, rules or regulations
framed thereunder. Such assets can be transferred in any manner for undertaking a
transaction permissible under the Act or rules or regulations framed thereunder.
(6) Where the asset or security in India cannot be acquired or held by the resultant
company under the Act, rules or regulations, the resultant company shall sell such
asset or security within a period of two years from the date of sanction of the
Scheme by NCLT and the sale proceeds shall be repatriated outside India
immediately through banking channels. Repayment of Indian liabilities from sale
proceeds of such assets or securities within the period of two years shall be
permissible.
(7) The resultant company may open a Special Non-Resident Rupee Account (SNRR
Account) in accordance with the Foreign Exchange Management (Deposit)
Regulations, 2016 for the purpose of putting through transactions under these
Regulations. The account shall run for a maximum period of two years from the date
of sanction of the Scheme by NCLT.
6. Valuation
(1) The valuation of the Indian company and the foreign company shall be done in
accordance with Rule 25A of the Companies (Compromises, Arrangement or
Amalgamation) Rules, 2016.
7. Miscellaneous
(1) Compensation by the resultant company, to a holder of a security of the Indian
company or the foreign company, as the case may be, may be paid, in accordance
with the Scheme sanctioned by the NCLT.
(2) The companies involved in the cross border merger shall ensure that regulatory
actions, if any, prior to merger, with respect to non-compliance, contravention,
violation, as the case may be, of the Act or the Rules or the Regulations framed
thereunder shall be completed.
8. Reporting
(1) The resultant company and/or the companies involved in the cross border
merger shall be required to furnish reports as may be prescribed by the
Reserve Bank, in consultation with the Government of India, from time to
time.
What is Management Buyout ? what are various reasons for which it is practised?
In its simplest form, an MBO involves a company’s management team combining
resources to acquire all or part of the company they manage. Most of the time, the
management team takes full control and ownership, using their expertise to grow
the company and drive it forward.
An MBO may offer a vendor an attractive alternative to sale to trade for a variety of
reasons; for example, the number of potential trade buyers may be limited, the
vendors may be nervous about approaching competitors and disclosing sensitive
information, or they may feel strongly that the company and its staff carry on
independently in what they believe to be “safe hands”.
In considering an MBO, a number of considerations need to be made, such as the
desire and credibility of the management team buying the company, the availability
of funding and whether all parties involved can agree upon the funding mix. If all the
boxes can be ticked, the MBO route can provide a vendor with the assurance of their
company’s future success and the management team with a significant opportunity
to benefit from future successes.
For a company undergoing a change in ownership, the management buyout route
offers advantages to all concerned. Most obviously, it allows for a smooth transition
of ownership. In addition, since the new owners know the company, there is a
reduced risk of failure going forward. Other employees are less likely to be
concerned, and existing clients and trading partners are reassured it will be “business
as usual”. Furthermore, the internal changes and transfer of responsibilities between
the vendors and management remain confidential, while any due diligence required
by funders is often handled quickly.
The strength of the management is a critical factor in contemplating the potential
future success of the company. Therefore, any funders pay close attention to the
skills, experience, knowledge, and credibility of the management team as well as
their vision for taking the company forward. And while the management team can
reap the rewards of ownership, they must make the transition from being employees
to owners, which requires a change in mindset from managerial to entrepreneurial,
and all parties need to ensure this is a transition that is achievable.
Explain the concept of Product life cycle
PLC, the term product life cycle refers to the length of time a product is introduced
to consumers into the market until it's removed from the shelves. The life cycle of a
product is broken into four stages—introduction, growth, maturity, and decline.
As mentioned above, there are four generally accepted stages in the life cycle of a
product—introduction, growth, maturity, and decline.
Introduction: This phase generally includes a substantial investment in advertising
and a marketing campaign focused on making consumers aware of the product and
its benefits.
Growth: If the product is successful, it then moves to the growth stage. This is
characterized by growing demand, an increase in production, and expansion in its
availability.
Maturity: This is the most profitable stage, while the costs of producing and
marketing decline.
Decline: A product takes on increased competition as other companies emulate its
success—sometimes with enhancements or lower prices. The product may lose
market share and begin its decline.

Give recent examples and explain in detail about ten forms of Corporate
Restructuring
Merger- Mergers are a way for companies to expand their reach, expand into new
segments, or gain market share. A merger is the voluntary fusion of two companies
on broadly equal terms into one new legal entity. The five major types of mergers
are conglomerate, congeneric, market extension, horizontal, and vertical.
Consolidation- Consolidation is a technical analysis term used to describe a stock's
price movement within a given support and resistance range for a period. It is
generally caused due to trader indecisiveness. A consolidation pattern could be
broken for several reasons, such as the release of materially important news or the
triggering of a succession of limit orders. Accounting-wise, consolidated financial
statements are used by analysts to evaluate parent and subsidiary companies as a
single company.
Acquisition- An acquisition occurs when one company buys most or all of another
company's shares. If a firm buys more than 50% of a target company's shares, it
effectively gains control of that company. An acquisition is often friendly, while a
takeover can be hostile; a merger creates a brand new entity from two separate
companies.
Diversification- Diversification is a strategy that mixes a wide variety of investments
within a portfolio. Portfolio holdings can be diversified across asset classes and
within classes, and geographically—by investing in both domestic and foreign
markets. Diversification limits portfolio risk but can also mitigate performance, at
least in the short term.
Demerger- Mergers are a way for companies to expand their reach, expand into new
segments, or gain market share. A merger is the voluntary fusion of two companies
on broadly equal terms into one new legal entity. The five major types of mergers
are conglomerate, congeneric, market extension, horizontal, and vertical.
Carve out- In a carve-out, the parent company sells some of its shares in its
subsidiary to the public through an initial public offering (IPO), effectively
establishing the subsidiary as a standalone company. Since shares are sold to the
public, a carve-out also establishes a new set of shareholders in the subsidiary. A
carve-out allows a company to capitalize on a business segment that may not be part
of its core operations as it still retains an equity stake in the subsidiary.
A carve-out is like a spin-off, however, a spin-off is when a parent company transfers
shares to existing shareholders as opposed to new ones. Joint venture
Reduction of capital- Capital reduction is the process of decreasing a company's
shareholder equity through share cancellations and share repurchases, also known
as share buybacks. The reduction of capital is done by companies for numerous
reasons, including increasing shareholder value and producing a more efficient
capital structure.
Buy-Back of securities- A buyback is when a corporation purchases its own shares in
the stock market. A repurchase reduces the number of shares outstanding, thereby
inflating (positive) earnings per share and, often, the value of the stock. A share
repurchase can demonstrate to investors that the business has sufficient cash set
aside for emergencies and a low probability of economic troubles.
Delisting of securities / company- The term "delisting" of securities means removal of
securities of a listed company from a stock exchange. Because of delisting, the
securities of that company would no longer be traded at that stock exchange.