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Presented By – Shivjeet Singh

take-overs. amalgamation. etc. . capital reorganization. M&A are the most popular means of corporate restructuring or business combination. buyback of shares.Introduction Corporate restructuring includes merger and acquisition. spin-offs. sale of business units and assets. leveraged buyouts.

. or both the organization are dissolved and assets an liabilities are combined and new stock is issued.Merger & Acquisition A merger is a combination of two or more organization in which one acquires the assets and liabilities of the in exchange of share or cash.

it is an acquisition. . it is a merger. it is consolidation.For the organization which acquires another. If both organization dissolve their identity to create a new organization. For the organization which is acquired.

Forms of Merger Horizontal merger This is a combination of two or more firms in similar type of production. . distribution or area of business. Vertical merger This is a combination of two or more firms involved in different stage of production or distribution.

Concentric merger This is a combination of two or more firms related to each other in terms of customer function.Conglomerate merger This is a combination of firms engaged in unrelated lines of business activities. . or technology used. customer group.

 To reduce competition.  To balance.  To avail tax concessions and benefits.Reason for merger and acquisition For buyer To increase the value of organization’s stock. .  To increase the growth rate and make a good investment.  To improve the stability of its earning and sales.  To take advantage of synergy. complete or diversify its product line.  To acquire a needed resource quickly.

For seller To increase the value of the owner’s stock and investment.  To increase the growth rate.  To deal with top management succession problem.  To acquire resource to stabilize operations.  To benefit from tax legislation. .

Establish a rational bridgehead without excessive start-up costs to gain access to a foreign market.  Overcome the problem of slow growth and profitability in one’s       own industry.  Utilize the under-utilized market power. . Utilize under-utilized resources-human and physical and managerial skills.Motives and benefit of merger and acquisitions  Limit competition. Circumvent government regulations. Achieve diversification. Displace existing management. Gain economies of scale and increase income with proportionately less investment.

 Indicate how the objective would be achieved. .  Treat people with dignity and concern.Guide lines for merger & acquisitions  Spell out the objective.  Check the compatibility of business styles.  Assess managerial quality.  Anticipate and solves problems early.