Corporate Restructuring

CIA 1A

Review of three research papers related to Mergers and Acquisitions

Mergers and Acquisition
Merger
Fusion of one company by another arrangement whereby the assets of two or more companies get
transferred to, or come under the control of one company (A+B=C)
Acquisition
Where company buys another company’s shares, by acquiring most of their shares (more than
50%), or by obtaining control of the management of the business and affairs of the company.
1ST Paper: Analytical study on the Merger of Bank of Baroda, Vijaya Bank and Dena bank.
Abstract:
This study examines the elements that contributed to the merger of the Bank of Baroda, Vijaya
Bank, and Dena Bank. The potential benefits and drawbacks are suggested. seven years' worth of
financial information
The three banks' merger decisions are gathered for this research. Financial tools like ratio analysis
and trend analysis are used for data analysis. Numerous ratios that reflect the health and
profitability of the bank's advances division are computed. It is investigated how NPAs are trending
and how they recover. It is proposed to reach a conclusion regarding the acceptability of the merger
decision and its outcomes.

Name of the Year of Author Journal Research Findings

Paper Publicatio s Name Name Methodolog
n y

ANALYTICA Published: Mr. Sai Internationa Pooled from MOTIVE

L STUDY ON May 2021 Kishore, l journal of secondary
THE Advanced sources.
MERGER OF Dr. Research Balance STRATEGY
BANK OF Hema (IJAR) Sheet, Three
BARODA, Divya, Banks data,
VIJAYA Different CONSEQUENCE
BANK AND and Mr. ratios S
DENA BANK K.V.L.
Madhav
 Findings
Motive (What was the strategy behind the merger)

To position Bank of Baroda as the worldwide conglomerate in the

banking sector with a focus on achieving increased operationality,
financial stability, and operating efficiency.

Mergers and Acquisitions are generally exercised to revive weak

entities from collapsing by merging them with stronger entities to
improve the performance or to amalgamate strong entities resulting
in a much stronger entity with a larger ambit of business. The
merger of Bank of Baroda, Erstwhile Vijaya Bank and Erstwhile
Dena Bank is to be understood as a merger intended to revive weak
entities from collapsing and thereby improving the performance.

Strategy

Three-way amalgamation
Amalgamation is the joining of two or more businesses into a
single, new entity by integrating their respective assets and
liabilities. In simple words, both companies transfer their assets
In a first three-way amalgamation, Vijaya Bank and Dena
Bank were merged with Bank of Baroda from April 1, 2019.

Consequence

The merger of Vijaya Bank and Dena Bank with BoB, has
catapulted BoB to becoming the second largest lender in the
public sector after the State Bank of India and the third largest
overall after SBI and HDFC Bank.
Technology, facility experience, and knowledge from Dena
and Vijaya Bank have helped Bank of Baroda become stronger
to tackle difficulties in a worldwide sector. This has
contributed to an increase in profitability.
By combining Dena and Vijaya Bank into Bank of Baroda and
using their effective risk management, financial risk has also
been decreased.
2nd Paper: A Study on the Merger of Andhra Bank and Corporation Bank with Union
Bank of India.
Paper ABSTRACT
The main goals of the study, which is titled "Merger of Andhra Bank, Corporation Bank with
Union Bank of India," are to understand why the merger is necessary and how it affects
banks' performance; to learn about the difficulties and advantages of the merger for banks
and customers; to assess the impact of the merger on the performance of banks.

broader influence on the Indian economy; and to understand how the merger will affect the
senior executives of the merging firms.
This study, which is based on responses from every client of the three banks—Andhra Bank
Corporation, Union Bank, and Bank of America—takes a sample size of 120.
Name of the Year of Authors Journal Research Findings
Paper Publicatio Name Name Methodology
n

A STUDY ON Published: Suchithra Internationa Based solely MOTIVE

THE MERGER 11, July K, Dr. l Journal of on secondary
OF ANDHRA 2020. Mohamme Innovative and primary
BANK AND d Arif Research in data STRATEGY
CORPORATIO Pasha, Managemen DATA
N BANK WITH Dr.M. t Studies SOURCE
UNION BANK Gurusamy (IJIRMS) ➢ RBI Data CONSEQUENCE
OF INDIA Published S
➢Newspaper
s ➢ social
media
➢ Company
Annual
Reports)
 Findings
Motive
Government experts believed that Corporation Bank and Andhra Bank lacked the financial stability
to compete with their larger peers and withstand potential losses. Therefore, it was decided to
combine them with the bigger and more powerful Union Bank of India.
It is simpler to combine the IT systems because all three banks use the same Core Banking
Software (Finacle by Infosys).
Maharashtra and Uttar Pradesh are strongholds for UBI's operations across India. After acquiring
Corporation Bank and Andhra Bank, it would have a significant presence in Karnataka, Telangana,
and AP.
Strategy
Amalgamation
After consulting with the Reserve Bank of India and acting in accordance with Section 9 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, the Central
Government published a gazette notification on March 4, 2020, notifying the merger of Andhra
Bank and Corporation Bank into Union Bank of India. The law will go into effect on April 1, 2020.
Consequence
According to information from Union Bank of India, there have been no job losses as a result of the
merger of Andhra Bank and Corporation Bank into Union Bank of India. Instead, employees have
benefited from the merger due to, an improvement in employee benefits through standardisation
among the three banks and expanded career opportunities due to the introduction of new verticals
in cutting-edge fields like analytics and business process redesign.
The regional focus of Union Bank of India towards the states of Andhra Pradesh and Telangana has
grown even stronger following the merger, with customers in the area benefiting from an increase
in bank branches and ATMs from which they can use banking services, a larger selection of
products and services thanks to the harmonisation of the same across the three banks, and enhanced
lending capacity for loans of larger size due to an increase in the number of bank branches and
ATMs.
3rd Paper
A study of amalgamation of oriental bank of commerce and united bank of India into
Punjab national bank
ABSTRACT
Finding the causes of the merger of Punjab National Bank, Oriental Bank of Commerce, and
United Bank was the goal of the research, the findings of which are provided in this paper.
We can observe the emergence of the major Public Sector Banks with Rs 18 Lakh.
Business of a billion dollars and impressive branch networking in India. Nirmala Sitharaman,
India's finance minister, proposed the creation of four large banks by combining 10 public
sector banks in an effort to strengthen the nation's economy. Due to this, the number of public
sector banks in the nation has decreased from 27 institutions in 2017 to 12. from April 1,
2020, the merged bank operates under a new name and logo.
The paper highlights the merit of Amalgamation of Banks and see the impact of post-merger
performance of selected Banks in economic growth.
Name of the Paper Year of Authors Journal Research Findings
Publicatio Name Name Methodolog
n y

A STUDY OF Published: Dr. Anshu Journal of The study of MOTIVE

AMALGAMATIO - Choudhary Emerging this paper is
N OF ORIENTAL November , Dr. Neha Technologie descriptive.
BANK OF 2020 Vasishta s and The STRATEGY:
COMMERCE Innovative secondary Amalgamation
AND UNITED Research data has
BANK OF INDIA (JETIR) been used to
INTO PUNJAB collect CONSEQUENCE
NATIONAL information. S
BANK Number of
press
releases,
research
publications,
journals and
newsletters
from various
Internet
websites
regarding to
this mega
merger 2020
has been
used for the
study.
 FINDINGS

Motive

Punjab National Bank and the Oriental Bank of Commerce and United
Bank of India (UBI) merged, according to an announcement made by
Finance Minister Nirmala Sitharaman on August 30, 2019. (PNB). With
assets of 17.95 lakh crore (US$220 billion) and 11,437 branches, the
planned merger would make PNB the second-largest public sector
bank in the nation.

Consequences

It appears that the merger of the three banks added value. In

addition to having the second-largest branch network in India
with 11,437 branches, 13856 ATMs, and 12,814 BCs to serve a
customer base of 18 crore plus, it has also resulted in high CASA
and lending capacity. With sales of 17.95 lakh crore, the
amalgamation has elevated PNB to the position of second-largest
Public Sector Bank in the nation. Despite economic difficulties,
there was clear improvement in the crucial metrics of core
profitability, asset quality, and capital.
 Conclusion
Six weaker public sector banks
In a relatively short period of time, India's financial sector
(PSBs) are combined with four
has surely produced a number of exceptional
'anchor' banks that perform
accomplishments for the largest and most varied
better as part of the public
democracy in the world.
sector bank merger.
As is well known, the Indian banking industry has
• Oriental Bank of Commerce
undergone numerous changes and seen a number of
and United Bank were
fruitful mergers and acquisitions, both of which have
combined with Punjab National
contributed to the industry's tremendous growth.
Bank, while Andhra Bank and
Corporation Bank were merged In August, 2019 the government merged 27 public sector
with Union Bank. banks and reduced to it 12.
We can sum up by noting that mergers and acquisitions
are viewed as a relatively quick and effective strategy to
The mergers between Syndicate
enter new industries and adopt cutting-edge technologies.
Bank and Canara Bank and
between Allahabad Bank and All the three papers taken were as follows:
Indian Bank went into effect on
1ST Paper: Analytical study on the Merger of Bank of
January 1, 2020.
Baroda, Vijaya Bank and Dena bank.
Overall Facts
• In 2019, Bank of Baroda
2nd Paper: A Study on the Merger of Andhra Bank and
combined with Dena and
Corporation Bank with Union Bank of India.
Vijaya banks.
3rd Paper: A study of Amalgamation of Oriental bank
The fourth-largest public
of Commerce and United bank of India into Punjab
sector bank in the nation is
national bank
now Canara Bank. The
merged business has a lower
gross NPA ratio of 8.77% and a
combined revenue of INR
15.20 lakh crore after the
merger.
.
• After the merger, Union Bank
of India grew to be the fifth-
largest PSB. The amalgamated
bank's combined revenue is
INR 14.59 lakh crore.
The Net NPA ratio for Union
Bank is very high at 6.85%.
After the merger, Indian Bank,
which is now the seventh-
largest PSB, has assets worth
 References

 Kishore S, Divya H, & Madhav K (2021), Analytical study on the Merger of Bank of Baroda,
Vijaya Bank and Dena bank, international journal of Advanced Research (IJAR), Volume: 9,
Issue: 4, ISSN: 2320-5407
 Suchithra K, Arif Pasha M & Gurusamy M, A (2020) Study on the Merger of Andhra Bank
and Corporation Bank with Union Bank of India, International Journal of Innovative Research
in Management Studies (IJIRMS), Volume 4, Issue 11. pp.26-38
 Choudhary A & Vashistha N (2020), A study of Amalgamation of Oriental bank of Commerce
and United bank of India into Punjab national bank, Journal of Emerging Technologies and
Innovative Research, Volume 7, Issue 11, ISSN-2349-5162
 Chigbu, C. U. (2015). Relationship Between Pre and Post Merger and Acquisition Banking
Industry Performance in Nigeria. Independent Journal of Management & Production (Ijm&P),
6(3).

Links
https://www.journalijar.com/uploads/60c329d2c04d9_IJAR-36131.pdf
http://ijirms.com/downloads/06072020030720-139.pdf
https://www.jetir.org/papers/JETIR2011278.pdf

Yashaswi
20212166