Mergers

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Acquisitions

business

ombination

Mergers

and

Acquisitions

Why Business Combination? Forms Of Business Combination

Mergers

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Acquisitions

Mergers

business

Amalgamation

ombination

Acquisitions Takeovers

Mergers

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Acquisitions

AI & IA TO MERGE IN APRIL TATA LIKELY TO REVISE CORUS TAKEOVER OFFER AMTEK AUTO RENEW BID TO ACQUIRE UK COMPANY TATA GROUP IN RACE FOR DAEWOO ROMANIA GE SNAPS UP SMITHS AEROSPACE FOR $4.8 BILLION HINDUJAS ENTER RACE FOR HUTCHS HTL STAKE IDBI BUYS 10% STAKE IN BAG FILMS RADIO UNIT US AIRWAYS RAISES BID FOR DELTA

Mergers

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Acquisitions

When two or more companies

combines into one company may merge with existing co, Merger form new company in India merger is called Amalgamation

Mergers

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Acquisitions

Merging Companies are called

Amalgamating Companies Merger

New Company is called

Amalgamated Company

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Merger Through Absorption

Merger MERGER THROUGH CONSOLIDATION

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Merger Through Absorption

An Absorption is Combination of two or more companies into an existing company All companies except one lose their identity

Merger

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Western Union Bank Merged With IDBI

New Bank Of India Merged With PNB

Bank Of New York Merged With Mellon Financial

Mergers

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Merger Through Consolidation

Merger

A consolidation is a combination of two or more Companies into a new Company

All companies are dissolved to form a new Company

Mergers

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Acquisitions

Merger Through Consolidation

Hindustan Computers Ltd

Merger

Hindustan Instruments Ltd

Indian Software Co .Ltd

Indian Reprographic Ltd

HCL LTD

Mergers

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Acquisitions

Acquisition
An Acquisition may be an act of acquiring effective control by one company over assets or management of another company without any combination of companies.. Companies may remain independent, separate But there may be change in control of Companies..

Mergers

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Acquisitions

Acquisition
Obtaining Control over management of a Company MRTP ACT-at least 25% voting right of a Company Investment of more than 10% share into a company Require approval of Shareholders & C Govt.

Mergers

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Dabur Pharma to acquire Thai company Aditya Birla Group to acquire Trinethra Chinas largest Bank to take over Indonesian Bank

Acquisitions WE ARE LOOKING ACQUIRE Mergers andTO

HOSPITALS
We are leading business house with a reputed presence in In health care sector in the country We are likely to acquire medium to large sized hospitals in Metros, state capitals & tier 1 cities. They could be on out right purchase or long term lease. We are also open to Joint Ventures

Pl. send proposals & contact details to indianhealth@gmail.com

Mergers

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Acquisition & Takeover

When Acquisition is unfriendly or hostile It may be called Takeover

Acquisitions Mittal -Arcelor Mergers and Case Mittal Steel bids for Arcelor-27.1.06 Mittal after Arcelors Cash -2.2.06 Mittal and Arcelor seek Support-6.2.06 Arcelor investors favour mittal but want more-15.2 Arecelor offer sweet,hostality wanning-mittal 16.2 Arecelor declared higher dividend than mittal-16.2 Mittal Steel Launched formal take over-19.5 Mittal raised bid before share holders meet-19.5 A,lor to merge with Russian Company Severstal 26.5 Mittal Arcelor start talks -9.6 Arecelor rejects mittal bid-12.6

Acquisitions Mittal -Arcelor Mergers and Case Mital woos Arcelor with 70% growth-13.6 Mittal may hike offer-21.6 Mittal Arcelor close to friendly deal-23.6 Mittal wins over more shareholders23.6 Arcelor gives in to Mittal-26.6 Did Mittal Yield too much-29.6 Arcelor,s largest S,holder reject Severstal - 30.6 Mittal Steel claims 92% shares of Arcelor -27.7 Mittal steel announces post merger plan-8.8 Merged Arcelor-Mittal named Mike Repley As CEO OF US operations

Tactics to Defend Acquisitions Mergers andTakeover..Merger

Divestiture Crown Jewels Poison Pill Greenmail White Knight Golden parachutes

Mergers

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FORMS OF MERGER

Horizontal Merger

Vertical Merger

Conglomerate Merger

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Merger Objectives

Faster Growth Improving Profitability Managerial Effectiveness Gaining Market Power Leadership Cost Reduction

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Are there any alternatives to Mergers or acquisitions?

Mergers

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Merger
Alternatives

Joint Venture Strategic Alliance Eliminating Inefficient Operations Productivity Improvement Hiring Capable Managers

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MOTIVES & BENEFITS

OF

MERGERS

Limit Competition Market Power Diversification Growth Economy of Scale Access to Foreign Market Resources Displace existing Management Circumvent Govt Regulations Aggressiveness Diversifying Risk Profitability

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Accelerated Growth

MOTIVES & BENEFITS

OF

MERGERS

Expanding Existing Markets Entering New Markets Expand Internally Expand Externally Developing Operating Facilities Price Paid for Merger

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Enhanced Profitability

MOTIVES & BENEFITS

OF

MERGERS

Economies of Scale Operating Economies Synergy

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Reduction in Tax Liability

MOTIVES & BENEFITS

OF

MERGERS

Carry forward Losses Tax on Share

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Financial Benefits
Eliminating Financial Constraints

MOTIVES & BENEFITS

OF

Deploying Surplus Cash Enhancing Debt Capacity Lowering Financial Costs

MERGERS

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Increased Market Power

Market Share

MOTIVES & BENEFITS

OF

Bargaining Power Technological Advancement Pricing Limiting Competition

MERGERS

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Planning
Steps in Analysis Of Mergers & Acquisitions

Search & Screening Financial Evaluation Mode of Merger Negotiation Post Merger

Mergers
Planning

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Steps in Analysis Of Mergers & Acquisitions

Objective of Acquisitions Strengths & Weaknesses Business Units-dropped or Added

Industry Data
Target Firm
Market Growth Competition Ease Of Entry Capital & Labour Degree of Regulation Quality Of Mgt Market Share Size Capital Structure Profitability Production &Marketing Capabilities etc

Mergers
Search & Screening
Steps in Analysis Of Mergers & Acquisitions

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Acquisitions

Where to look for candidates Is it too large or small Engaged in related or unrelated Activity Export oriented or Local Amenable or not amenable to merger

Mergers
Financial Evaluation
Steps in Analysis Of Mergers & Acquisitions

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Acquisitions

Determining
Earnings Cash flows Areas Of Risk Maximum Price Payable How to Finance Merger

Current Market Value

Premium Value

Mergers
Mode of Merger
Steps in Analysis Of Mergers & Acquisitions

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Acquisitions

Regulations Time frame Resources Degree of control Assume hidden liabilities

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Negotiation
Steps in Analysis Of Mergers & Acquisitions

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Acquisitions

Your intentions should be to pay one dollar more than the value to the next highest bidder and an Amount that is less than the value to you

Mergers
Post Merger
Steps in Analysis Of Mergers & Acquisitions Check Hostility

and

Acquisitions

Anticipate Problems Solve Problems Treat people With Dignity

Art of taking over Company Without overtaking It

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Value Created by Merger

Economic Advantage (EA) if VPQ > (VP + VQ)

Where

VPQ =Combined PV of merged firms

VP= Worth of Firm P VQ=Worth of firm Q

Value Created by Merger Mergers and Acquisitions

Economic Advantage
EA = VPQ - (VP + VQ)

Few Mergers, Acquisitions, Take over Mergers and Acquisitions

New Bank Of India merged with Punjab National Bank Global Trust Bank Taken over by OBC Western United Bank taken over by IDBI International Data Management By HCL Ltd Chhabrias took over Shaw Wallace, Dunlop Ashok Leyland By Hindujas Spensers By Goenkas VSNL by Tata Tata Tea Ltd Acquired Consolidated Coffee Company Tomco with HLL Tata Fertilizers Merged With Tata Chemicals Sundaram Clayton Merged With TVS-suzuki Ltd
MITTAL STEEL'S ACQUISITION OF ARCELOR