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³Businesses will integiate themselves into the

woilu economy thiough meigeis Ƭ alliancesǤDz
- Peter Drucker in his
book ³Managing for the
future´
Restructuring is the latest buzzword in corporate circles.
Restructuring is the corporate management term for the act of
partially dismantling or otherwise reorganizing a company for
the purpose of making it more efficient and therefore more
profitable. It generally involves selling off portions of the
company and making severe staff reductions.
Corporate Restructuring is not a new phenomenon in India. It
has, however, become very profound after 1991.
Corporate
Restructuring
Portfolio
Restructuring
Organisational
Restructuring
Functional
Restructuring
Portfolio Restructuring refers to change in the portfolio of
businesses of the company.
If a firm is reshuffling its assets by selling some of its existing
production facilities or acquiring some new facilities to produce
the feeding raw±material for the main product, it is called
Portfolio Restructuring.
It involves changes in the configuration of business in which a
firm is operating through acquisitions. It is for making additions
to or disposals from companies' businesses e.g. through
acquisitions or spin-offs. Portfolio restructuring also has a high
probability of improving performance, although the performance
gain is likely to be much more modest than with financial
restructuring.
Organizational Restructuring has been very common.
Decentralization, delayering or flattering and re-grouping of
activities are important organizational restructuring measures.
Increase or decrease in activity levels, expansion or contraction of
portfolio or functions etc. may cause modification of
organizational structure.
Change in Corporate Strategy such as portfolio strategy,
sometimes call for organizational restructuring as often structure
follows strategy.
The All India Management Association (AMA) survey reveals
that restructuring of corporate functions (marketing, operations,
personnel and finance) has been very significant both in the public
and private sectors.
MARKETING FUNCTION ± The survey results show that the
revamping of the marketing function meant the creating of a
product management team, building up sales force, restructuring
distribution system and creating marketing research cell.
FINANCIAL FUNCTION - As far as the modifying of the
financial function was concerned the emphasis was on improving
the financial reporting system.
OPERATION FUNCTION ± Restructuring of operations has
been very significant. Re-engineering has become very popular.
Technological up gradation has been important concern. The
acceptance of total quality management and the requirements for
ISO 9000 certification etc. have had significant influence on
operational restructuring.
PERSONNEL FUNCTION - Personnel Function was found to
receive high priority in restructuring. The emphasis of both public
and private sectors
Mergers and Acquisitions
Tender Offers
Joint Ventures
Spin ± Offs
Split-Offs
Split-Ups
Divestitures
Equity Carve-outs
EXPANSI0N SELL 0FFS
Premium Buy-backs
Standstill Agreements
Antitakeover Amendments
Proxy Contests
Exchange Offers
Share Repurchases
Leveraged Buy-outs
C0RP0RATE C0NTR0L
CBANuE IN 0WNERSBIP
STR0CT0RE
Merger means combining of two commercial companies into one.
- Oxford Dictionary
Merger is a fusion between two or more enterprises, whereby the
identity of two or more is lost and the result is a single enterprise.
Merger is an arrangement for bringing the assets of two firms
under control of one.
When two or more companies agree to combine their operations,
where one company survives and other loses its existence, a
merger takes place.
The surviving company acquires all the assets and liabilities of
the merged company.
The company that survives is generally the buyer and it either
retains its identity or the merged company is provided with a new
name.
A basic feature of merger is that one company takes the
ownership of another company and combine its operations with
that of its own operations.
HORIZONTAL MERGER
VERTICAL MERGER
CONGLOMERATE MERGER
STYLE OF MERGERS MOVES
Negotiated Merger
Tender offer
Hostile Takeover Bid
Arranged Merger
Reverse Merger
The authorized, issued and subscribed/paid up capital of the
transferor/transferee company.
Size of Board of Directors and Participation of Transferee
Company¶s director¶s on the board.
Terms and conditions of the scheme of amalgamation/merger and
effective date of amalgamation.
Fixing of a cut-off date from which all assets both movable and
immovable of amalgamating company shall be transferred to the
amalgamated company.
Deciding the name and accounting year.
SCHEME OF SCHEME OF
MERGER/AMALGAMATION MERGER/AMALGAMATION
Object clause of the memorandum of association of the
transferor and transferee companies so as to determine whether
the power of amalgamation exits or not..
The scheme must provide protection to the existing employees.
Obtaining of approval of shareholders, creditors, financial
institutions/banks
Expenses of amalgamation
Dividend position and future prospects.
LEuAL Ƭ PR0CEB0RAL ASPECTS 0F
NERuER
Analysis of Proposal by the Companies
Determining Exchange Ratio
Approval of Board of Directors
Approval of Shareholders
Consideration of interests of the Creditors
Approval of the Court
Approval of Reserve Bank of India