CORPORATE RESTRUCTURING

Meaning:
Corporate restructuring is the process of redesigning one or
more aspects of a company.
The process of reorganizing a company may be implemented
due to a number of different factors, such as positioning the
company to be more competitive, survive a currently
adverse economic climate, or poise the corporation to move
in an entirely new direction.
 ORGANIC GROWTH

 Organic (or internal) growth involves expansion from within a

business
• Ex; By expanding the product range, or number of
business units and location.
 Organic growth builds on the business’ own capabilities and
resources. For most businesses, this is the only expansion
method used.
 Organic Growth Strategies

 Developing new product ranges

 Launching existing products directly into new international
markets .
(e.g. exporting )
 Opening new business locations – either in the domestic
market or overseas
 Investing in additional production capacity or new technology
to allow increased output and sales volumes
 INORGANIC GROWTH

 Inorganic growth arises from mergers or takeovers rather

than an increase in the company’s own business activity.
Firms that choose to grow inorganically can gain access
to new markets through successful mergers and
acquisitions. Inorganic growth is considered a faster way
for a company to grow compared to organic growth.
INORGANIC GROWTH STRATEGIES

• Combining with a similar company to grow market share 

• Acquiring another company whose products, services and/or
customer base a company wishes to have
• Merging two dissimilar companies (known as a conglomerate
merger), thereby creating a combination of two totally
unrelated businesses 
• Opening in a new location, in order to gain customers in a
geographical area in which a company is  not represented
 KEY TAKEAWAYS
• Inorganic growth is growth from buying other businesses or opening new
locations. 
• Meanwhile, organic growth is internal growth the company sees from its
operations, often measured by same-store or comparable sales. 
• Acquisitions can help immediately boost a company’s earnings and increase
market share. 
• The downside of inorganic growth via acquisitions is that implementation of
technology or integration of the new employees can take time.
• Inorganic growth involving the opening of new stores can capitalize on high-
traffic areas, but it can also cannibalize existing stores. 
Merger And Acquisition
Examples
 MERGER

Vodafone Idea merger

Idea Vodafone merger and acquisition in India reuters reported the Vodafone Idea merger to be valued at $23 billion.
Although the deal resulted in a telecom giant it is safe to say that the 2 companies were pushed to do so due to the entry of
Reliance Jio and the price war that followed. Both companies struggled amidst the growing competition in the telecom
industry.
The deal worked both for idea and Vodafone as Vodaphone went on to hold a 45.1% stake in the combined entity with the
Aditya Birla group holding a 26% stake and the remaining by Idea. On the 7th of september, Vodafone Idea unveiled its brand
new identity ‘Vi’ which marked the completion of the integration of the 2 companies.
Disney and Pixar
Mickey and Nemo. Pinocchio and “Toy Story.” Cinderella and “Cars.” The merger of legendary Walt Disney and everything-
we-create-kids-adore Pixar was a match made in cartoon heaven. Disney had released all of Pixar’s movies before, but with their
contract about to run out after the release of “Cars,” the merger made perfect sense. With the merger, the two companies could
collaborate freely and easily.

AT&T and Time Warner

Two organization that were already familiar with mergers and acquisition joined forces in 2018. This acquisition was so
massive the U.S legal department had to interfere to sort out the issue.
AT&T first showed its interest to buy Time Warner in 2016 and, following actual government opposition, AT&T and Time Warner
completed an $85.4 billion merger after receiving approval from the regulatory body.
The U.S Department of justice who opposed the deal said the government would not prevent the deal between them.
CMC and TCS
In this merger, TCS absorbed CMC into itself, thereby consolidating their IT businesses into one with greater financial
flexibility and strength, further reach, a more rationalized structure, a more focused operational effort, standardized and
simplified business processes, and greater productivity.

Sun Pharmaceuticals and Ranbaxy

In this deal, Sun Pharmaceutical absorbed Ranbaxy in order to fill Sun’s gaps in its US market, gain greater access to
emerging markets, and increase its presence domestically. This also made Sun the largest generic company in dermatology
products.
 ACQUISITION

Salesforce and Slack acquisition

Salesforce and Slack acquisition (2021) - $27.7BFinally, although the deal has just closed, the acquisition of Slack by
Salesforce for a reported fee of $27.7B looks to be a winning combination. The deal is the second biggest of all time for a
software company (the largest being IBM’s 2019 acquisition of RedHat) but already looks like it has the potential to generate
massive synergies for both companies. Time will tell, but this one looks like it could be a winner.

Facebook’s and Whatsapp acquisition

$22BTake the example of Facebook’s acquisition of Whatsapp in 2014 for $22B. Although the internet was awash with
analysts using the word “overpaid”, time - and the fact that the platform has 70 million users in the US alone - have proven
them wrong.The app also provides potential for Facebook to bring more businesses onto its advertising program, with
thousands of businesses coming onto the platform every day.
Walmart Acquisition of Flipkart
Walmarts acquisition of Flipkart marked its entry into the Indian Markets. Walmart won the bidding war against
Amazon and went onto acquire a 77% stake in Flipkart for $16 billion. Following the deal, eBay and Softbank sold their stake
in Flipkart. The deal resulted in the expansion of Flipkart’s logistics and supply chain network. Flipkart itself had earlier
acquired several companies in the e-commerce space like Myntra, Jabong, PhonePe, and eBay.

Amazon and Whole Food

Amazon acquired Whole Foods Market for a total of $13.7 billion deal. It made the e-commerce giant move into many physical
stores. Also, it will make Amazon continue on its long goal of selling more groceries.
TATA STEEL-CORUS
Tata Steel is one of the biggest ever Indian’s steel company and the Corus is Europe’s second largest steel company. In
2007, Tata Steel’s takeover European steel major Corus for the price of $12.02 billion, making the Indian company, the world’s
fifth-largest steel producer. Tata Sponge iron, which was a low-cost steel producer in the fast developing region of the world
and Corus, which was a high-value product manufacturer in the region of the world demanding value products. The
acquisition was intended to give Tata steel access to the European markets and to achieve potential synergies in the areas of
manufacturing, procurement, R&D, logistics, and back office operations.
HORIZONTAL MERGERS
A horizontal merger is a merger or business consolidation that occurs between
firms that operate in the same industry. Competition tends to be higher among companies operating in
the same space, meaning  synergies and potential gains in market share are much greater for merging
firms.

Few examples;
Integration of Facebook, Whatsapp, Instagram & Messenger
Disney + & Hotstar
Canara bank with Syndicate bank
Adidas with Reebok
Flipkart with Myntra..etc
Purpose:
• Increase diversification
• Reshape the company’s competitive scope by reducing intense rivalry
• Share complementary skills and resources
• Increase market share and reduce competition in the industry
• When companies undergo a horizontal merger, the underlying principle is to create value. A
successful merger should create value in which combining the companies would be worth more
than if each company were under independent ownership. In a horizontal merger, 1 + 1
(referring to two independent companies) should be greater than 2 (the merged company).
Examples for horizontal merger:
1. Integration of Facebook, Whatsapp, Instagram & Messenger
This is one of the best examples of horizontal mergers of present times. All of these
were independent social media platforms started by different companies and one after
another, over the years, these were integrated into one big social media company. The
platforms still remain independent in the form that the various websites still exist, but
they have come under one company under Facebook Inc. led by Mark Zuckerberg. One
of the reasons for merging with Whatsapp is to develop and implement the end to end
encryption technology to preserve user privacy. Even though the websites and apps are
distinct, the users can interact among them freely by being on one single network. Also,
as Facebook reached maturity, integration is a strategy to drive growth.
2. Disney + & Hotstar
Disney + is Disney’s own online video streaming platform, while
Hotstar was India’s streaming platform owned by Star network.
Instead of entering into the streaming industry of India directly,
Disney has merged with Hotstar, which is now known as Disney+
Hotstar. This merger has seen a little bit of rebranding and Disney
has aimed to launch this platform from March end in 2020, for the
consumers in India who could access Disney’s shows and films on
this merged platform. With this merger, and the launch of its own
streaming services, Disney has removed a lot of its content from rival
platforms such as Netflix to capture higher market share.
3. Canara bank with Syndicate bank
As per the Indian Reserve Bank (RBI) rules, Syndicate Bank and
Canara Bank merged on April 1, 2020. However, the bank's IFSC code
stayed the same for nearly a year to offer consumers a buffer period.
MD & CEO, Canara Bank, L V Prabhakar said: The amalgamated Bank shall
massively enhance the reach of banking services to the larger public and
augment the financial inclusion activities currently underway. All branches
of Syndicate Bank will function as branches of Canara Bank.

This bank will become the fourth-largest public sector bank with a business
of Rs 15.20 lakh crore, which will be roughly 1.5 times of Canara Bank.
It will have the third-largest branch network in India with 10, 342
branches, which will have a strong presence in South India.
4. Adidas with Reebok
Adidas and Reebok are the world leading multinational companies producing
sportswear and sports equipment. Reebok is considered to be the oldest
company of this type, because it produces sportswear since the end of the 19th
century.
Adidas on its turn is a quite younger company and it appeared in 1920 and started
producing sports shoes.Both companies have been developing gradually and very
soon conquered the market of the whole world winning attention and respect of
new and new customers. In 2000-s both companies reached the top of their
development and the companies did not only produce sportswear but also played
the role of sponsors of numerous football, basketball teams, etc. Of course, in the
modern world of strict competition on the market both companies strived to win
the leading positions in the world. The financial position of Reebok was quite
unfavourable and Adidas suggested merging both companies into the single
unity.In 2005 Adidas purchased 100% of Reebok’s bonds and made it its subsidiary.
5. Flipkart with Myntra
Flipkart and Myntra merger case study brought the two biggest e-tailers of
India together. The merger made it possible for both investors Flipkart and
Myntra to strengthen their parts. Thus Flipkart strengthened its structure of
product offering while Myntra got a chance to leverage its infrastructure.
Moreover, the Flipkart and Myntra merger was taken with a vision to
compete with Amazon as well others.

The thing happened in mid-summer of 2014 when India’s biggest e-tailer

Flipkart announced the Indian e-commerce industry – the merger with
Myntra, its competition and leading company in the apparel and fashion
segments, a zone in which Flipkart was lagging behind other players. 
At this moment, the co-founders of Flipkart ( Binny Bansal and Sachin
Bansal) claimed that they know the future of fashion is e-commerce in
India. Moreover, Myntra has significant domain knowledge with an excellent
team along with good relations with lifestyle brands.
 • A Vertical merger is a
merger between firms
VERTICAL
operating at different
MERGER
stages of production.
• There are no
competitors.
 EXAMPLES OF VERTICAL MERGER
• A textile company merging with a cotton yarn
manufacturer 
• A merger between an online shopping website and a
payments company.
• An automobile company merging with a steel manufacturer.

• A car manufacturer that purchases a tire company.

• Ebay and Paypal
 1 MARKET EXTENSION MERGER
TYPES OF 2 PRODUCT EXTNSION MERGER
VERTICAL 3 BACKWORD INTEGRATION MERGER

MERGER 4 FORWARD INTEGRATION MERGER

5 BALANCED INTEGRATION MERGER
MARKET It is a merger between companies
that sell the same products or
EXTENSION services but that operate in
MERGER different markets.
 EXAMPLES OF MARKET
EXTENSION MERGER
 WalMart and Flipkart.
Walmart is an American multinational retail corporation that
operates the chain of hypermarkets, grocery stores etc
whereas, Flipkart is a Indian e-commerce company.
 Kraft Foods company merged with Cadbury company
Kraft foods company is a food manufacturing company that provide
high quality and great taste whereas, Cadbury is a
confectionery(food items rich in sugar and carbohydrate)
company
 EXAMPLES OF MARKET EXTENSION
MERGER
 Shoe maker company one from Lahore, and other from Karachi.
 Tata Steel Corus (as Already Explained in Merger and Acquisition)
 Dells alien ware Gaming laptops.
Dell is an American technology company that develops and produces
laptops, computers, storage and services etc. whereas, Alienware is
an American computer hardware and subsidiary of dell.

26
Product Extension
Merger & Forward
Integration
 Product Extension Merger

A product extension merger is a merger that takes place

between two business organizations that deal in products
that are related to each other and operate in the same
market.
It adds new products to the organization’s product line and
also expands the market share and profitability.
07/02/2022 Basics of mergers 28
 Examples
• The merger of Pizza Hut and PepsiCo in 1977 was a Product
Extension Merger. Pizza & Soft Drinks, like Pepsi, are not the
same products but cater to the same industry. Thus, to expand
its soft drink reach, Pepsi merged itself with Pizza Hut.

• The merger of Broadcom and Mobilink, Broadcom- a

Bluetooth system manufacturing firm merged with Mobilink
Telecom Inc., a supplier of chips & mobile design. In the above
case, both the organizations operated in the same industry but
provided different products.

07/02/2022 Basics of mergers 29

 • The Hyderabad-based Matrix Laboratories announced that
it is going to merge with Fine Drugs and Chemicals Ltd
(FDCL). After the merger, the company is called Matrix
Fine Sciences Pvt Ltd.

• Patanjali acquired Ruchi soya, the acquisition will help

Patanjali acquire edible oil plants as also soyabean oil
brands such as Mahakosh and Ruchi Gold.

• If KFC merges with Coca-Cola in the future Coca-Cola

gets an advantage to expand its soft drinks category and
also come up with new soft drinks that suits the menu of
KFC.

07/02/2022 Basics of mergers 30

 Forward integration
Forward integration is a form of vertical integration in which a
company moves further in the direction of controlling the
distribution of its products.

Gain control over distribution channels and Increase barriers to

entry for a new firm.

07/02/2022 Basics of mergers 31

 Examples
Flipkart
The company has acquired the logistic company called E-
kart and taken the control of the distribution of the
products to the end customer. This is one of the strategies
which will create a barrier to the entry of a new firm into
the market.

07/02/2022 Basics of mergers 32

 Amazon

The company has got its own logistic service for the
supply chain of the products. FBA model also known as
Fulfillment by Amazon where the company takes care of
the entire logistics to end customer support. When a
customer orders from a particular seller, then the product
is shipped to Amazon’s warehouse facility after that the
company is responsible to ship the product to the end
customer.

07/02/2022 PRESENTATION TITLE 33

 A farmer who directly sells his crops at a local grocery
store rather than to a distribution center.

Amway
The company directly sells its product to the customer.
The company has got no middlemen for the shipping of
its product to the end customer. The company is the one
who is responsible for the ship the product to the end
customer and has its own logistic service.

07/02/2022 PRESENTATION TITLE 34

 All OTT Platforms
The OTT platforms like Netflix, Amazon prime, and
Disney+ Hotstar have got no distribution network here
companies provide the direct service to the end customer.
The customer can avail of the service by buying the
particular plans given by the company and the customer
receive that directly from the company.

07/02/2022 PRESENTATION TITLE 35

Thank you
Rohan Musale
 BACKWARD
INTEGRATION
MEANING:
 Backward integration Occurs when a
company buys another company that
supplies the products or services
needed for production.

 Backward integration allows businesses

to obtain control over suppliers and
improve supply chain efficiency.
EXAMPLES :
1. Peloton is American exercise equipment and
media organization. Peloton integrated
backward in 2012 into organization-owned
hardware manufacturing after initially relying
on contract manufacturers. Peloton acquired
Tonic Fitness Technology, a Taiwanese
manufacturing organization, in October 2019.
In December 2020, Peloton acquired Precor, a
workout machine manufacturer. 
2. Netflix was a platform to distribute films and
TV shows created by others. It then decided to
make original content. This strategy has
helped boost Netflix’s continuing success.
Netflix streams more original content reducing
their dependency on film studios and their
licensing. 

3. Ferrero Group is a confectionery manufacturing

organization that makes chocolates and
chocolate spreads with hazelnut as the main
ingredient. It acquired Otlan group, a global
leader in supplying hazelnuts, for $500 million.
By this acquisition, Ferrero improved the
quality of its hazelnuts that form the main
ingredient for its popular products such as
Nutella, Ferrero Rocher and Kinder. 
4.Continental,an international automotive
supplier and tire manufacturer, acquired
Veyance Technologies, a manufacturer
of rubber products for industrial
organizations. With this acquisition,
Continental was able to expand its
global position in rubber and plastics
technologies. It was also able to
increase the proportion of industrial and
end-customer sales.
5. In 1995 Amazon started as an online
book retailer (internet bookstore)
procuring books from publishers. In
2009 Amazon started “Amazon
Publishing” which allows them to publish
books. After the above, Amazon may
receive a cut on both as publisher and
as bookseller if a reader buys one of its
titles.
Balanced Integration
Definition ;

 A balanced integration is one which a company merger with other businesses

to attempt to control both upstream and downstream activities.

 This is quite simply a combination of both backward and forwards integration.

For instance, balanced integration would be where a company mergers' with
both a company that is before it in the supply chain, as well as one that is after.
Therefore, balanced integration involves two transactions - one downstream,
and another upstream
For Example;
 1.Hershey were to acquire both its coca bean suppliers and a
distributor such as target.

 It relies on cocoa bean suppliers to provide it with its raw materials – it also
relies on distributors such as Walmart and Target to sells its products.
Obviously, this is a very rare type of integration that infrequently occurs
mainly due to the cost, but also due to potential legal disputes that may arise
due to monopoly control of the vertical supply chain.
CONGENERIC MERGER
Meaning…
A congeneric merger / Concenric merger it is a merger of two companies operating in
the same industry / related industry but offer different products or different lines of
products.

The two companies involved in a congeneric merger may share similar production
processes, distribution channels, technology.

Purpose…
• Congeneric merger can help the merged company to quickly increase its market
share or expand its product lines
Reasons for Merger
• Diversification of products or services
• Larger market shares for the company’s
• To reduce the risk
• More profits & financial gains
1. CITICORP AND TRAVELERS GROUP
• The formation of Citigroup in 1998 is one such example. This was formed
following the merger of Citicorp and Travelers Group. Both these firms used
to operate in the same industry, however product offerings were different for
both these firms. Before the merger and formation of Citi Group, Citicorp was
in the traditional banking services and credit card offering. And though
Travelers was in the same industry but was offering insurance and brokerage
services..

Financial service industry

2.COKE AND VITAMIN WATER
When Coke announced its plan to buy Vitamin Water in 2007, it gave the company an
even stronger foothold in the Beverage industry - a smart move at a time when more
beverage consumers were looking for options other than soda. 
Coke which has been looking to expand its non-carbonated beverage portfolio in a bid
to jump-start north American sales, said it will buy Vitamin water for 4.1B$.

Food and beverage industry

 3. HEINZ AND KRAFT
• One of the biggest examples of a congeneric merger is the $100 billion deal
between Heinz and Kraft in 2015. At the time, Kraft was a major producer of
mayonnaise, cheese and more. And, Heinz was the bigger producer of pasta sauce,
meat sauce and frozen appetizers. The merger between the two resulted in the
creation of one of the biggest companies in the food industry, Kraft-Heinz.

Food and beverage industry

CONGLOMERATE
MERGER

EXAMPLES
 What is a Conglomerate Merger?

A conglomerate is a large company composed of smaller

companies it has acquired over time. With this definition in
mind, a conglomerate merger is a merger that involves two
firms from unrelated business industries and activities.
Conglomerates are less popular today, but were quite
popular in the 1960s and 1970s. A Conglomerate merger is
seen as a valuable move if the value of the two companies
combined is more than they are valued at separately; this is
often expressed by the 2 + 2 = 5 equation.
Examples of a Conglomerate Merger

1. Walt Disney Company & American Broadcasting

Company merger - this is often cited as a prime example of
a conglomerate merger. In 1995, Disney purchased ABC,
gaining entry into ABC’s national television realm, as well as
ESPN’s extensive sports coverage. Since Disney already
owned several cable networks at the time of the deal this
would be a mixed conglomerate merger because it did open
up extensive new distribution and content options for
Disney.
2. eBay & PayPal merger - in 2002, eBay bought PayPal,
providing it with a streamlined payment process for its
goods. This merger combined the purveyor talents
represented by eBay’s product platform with PayPal’s
simplified electronic payment processing platform that
was already popular with consumers. The two companies
split in 2015 because of pressure from stockholders and
the rapidly changing business environments in both
commerce and payments, but they signed a five-year
agreement that guaranteed reliable income to PayPal
while it successfully expanded its platform to other
competing retailers and financial firms..
3. Honeywell & Elster merger - this 5.1 billion dollar
conglomerate merger in 2016 was attractive to
Honeywell (which has a very active M&A portfolio) due to
the fact Elster would lead to product and geographical
growth.
4. COMCAST & UNIVERSAL merger - this merger was
completed in 2011; it created a media empire that
oversees how television shows and movies are created,
but also how they are delivered to consumers’ homes via
Comcast’s extensive network. Given the current social
and business environment created by COVID, Comcast’s
customers turn more and more to the company’s
platforms for their entertainment and business needs,
across multiple technology outlets...television, computer,
tablets and smartphones, making this merger even more
valuable and opportunistic.
5. Amazon & Whole Foods merger- Amazon’s purchase
of Whole Foods in 2017 has been categorized at times
as a horizontal merger, and at other times as a vertical or
even conglomerate merger since Amazon fully broke into
the grocery industry, illustrating the complexities and
crossovers involved with some modern day large
mergers.
THANK YOU

METI MEGHANA
 De-Mergers
Spin-off and Spilt-off
 De-Mergers

A de-merger is when a company splits off one or more divisions to

operate independently or be sold off.

A demerger is a form of corporate restructuring in which the entity's

business operations are segregated into one or more components. It
is the converse of a merger or acquisition.
The demerger of ICICI Lombard General Insurance Co.
 ICICI Lombard General Insurance Company Limited was a subsidiary
of ICICI Bank Ltd. It merged with Bharti AXA, and this caused the
shareholding of ICICI Bank to drop from 51.86% to 48.08%.
 Piramal Enterprises Limited has a global distribution
network in more than 100 countries and is one of
India’s leading diversified companies. It has its
presence in pharmaceuticals and financial services.

 On October 7th, 2021, it approved the demerger of its

pharmaceutical business and create two listed entities
in financial services and pharmaceuticals. This
demerger aims to facilitate the pursuit of scale with
more focused management and flexibility.
 Spin-Off

Many a time a company creates a new independent business through sale

or distribution of new shares of an existing business. This is known as
spin-off.
The independent business gets assets, employees, technology,
intellectual property, or existing products from the parent company .
 For example: when Agilent Technologies was spun off
from Hewlett-Packard in 1999, the stock holders of HP
received Agilent stock.

 DELL spin off stake in VM Ware.

(Dell Technologies to spin-off its 81% equity ownership of
VMware, forming two standalone public companies)
 Split- Off

A split-off is when a new entity is created from the

parent company and shareholders of the parent
company exchange their shares for the newly created
entity.
 The strategy involves the division of shareholders
from the parent company. The shareholders
allocated to the new company sell their shares in
the host company. It is a form of stock repurchase
whereby the parent company buys back its shares.
New York City-based media giant Viacom Inc. and its
video rental subsidiary, Blockbuster Inc., jointly
announced the terms of their proposed separation.
 The transaction would involve Viacom's distribution
of its interest in Blockbuster through a "split-off"
exchange offer to Viacom stockholders.
REVERSE MERGERS
 REVERSE MERGERS
MEANING :
A reverse mergers or Reverse IPO is the acquisition of a private company by
an existing public company so that the private company can bypass the lengthy
and complex process of going public.
A private company acquires a publicly listed company.
The owners of the private company become the controlling shareholders of the
public company.
 EXAMPLES OF REVERSE MERGERS

ICICI Group merged with its arm ICICI Bank in 2002:

The Parent companies Balance Sheet was more than three times the size of its
subsidiary at the time. The rational for the reverse merger was to create a universal
bank that would lend to both industry and retail borrowers.

 Hardcastle Restaurants Private Limited (“HRPL”), a master franchisee which

operates the McDonald's branded restaurants in western and southern India and which also became
the direct subsidiary of Westlife Development Limited (“WDL”), a BSE- listed company, by way of
a composite scheme of arrangement and amalgamation under a reverse merger in the year 2013.
 EXAMPLES OF REVERSE MERGERS
 The Jindal (April 2003) - 
The Sajjan Jindal - controlled Jindal iron and steel company and its subsidiary, Jindal Vijayanagar
steel merged their business through reverse merger to create a Rs. 4000 crores plus entity. They
merged in an effective share swap ratio of 1:1 after reorganization of Jindal Vijayanagar steel’s capital.

IBP Reverse Mergers with Indian Oil (May 4th 2007):

IBP co. Limited, the stand-alone petroleum marketing subsidiary of Indian Oil Corporation Limited
with exclusive business groups for Explosives and cryogenics, was merged with the parent company
with effect from 2nd May, 2007. This was a step towards achieving smooth and seamless integration of
business to integrate the various business segments of erstwhile IBP with similar business segments of
the respective divisions of Indian oil at the earliest.
 EXAMPLES OF REVERSE MERGERS

 India bulls (April, 2012) :

India bulls completed the reverse merger of India bulls’ financial services with
India bulls housing finance. The share swap ratio among the stakeholders in the two
companies was fixed at 1:1. This move enabled efficient utilization of India bulls
financials’ capital, consolidating it into the housing finance company, which
accounts for most of the incremental mortgage business.
DISINVESTMENT
 DISINVESTING IS
AN EXIT
STRATEGY THAT
MEANS TAKING
OUT AN EXISTING
INVESTMENT.
DISINVESTMENT
POLICIES ARE
COMMONLY
FOLLOWED BY
GOVERNMENTS
TO ALLOCATE
RESOURCES MORE
EFFICIENTLY. 
 Minor Major Complete
Disinvestment Disinvestment Privatization

A minority A majority Complete

disinvestment is one disinvestment is one privatization is a form
such that, at the end in which the of majority DIFFERENT TYPES
of it, the government government, post disinvestment wherein
retains a majority disinvestment, retains 100% control of the OF
stake in the company, a minority stake in the company is passed on DISINVESTMENT
typically greater than company i.e. it sells to a buyer.
51%, thus ensuring off a majority stake. 
management control. 
  AIR INDIA :
The Government offered to sell a 76
percent stake in the state-owned airliner in 2018.
H o w e v e r, i t c o u l d n o t r e c e i v e a s u c c e s s f u l b i d t h e n .
The Government reopened their process this year in
J a n u a r y, t h i s t i m e w i t h i n t e n t i o n o f d i s i n v e s t i n g
c o m p l e t e l y.
 LIFE INSUARANCE CORPORTION :
EXAMPLES  T h e G o v e r n m e n t a n n o u n c e d t h e d i s i n v e s t m e n t i n
t h e l a r g e s t i n s u r e r o f t h e c o u n t r y t h i s y e a r.   L I C
disinvestment is a unique case as disinvestment in the
state-owned insurer will demand amendments to the LIC
Act. The Government has appointed Deloitte and SBI
Capital markets as their transaction advisors, which is
the first step of the disinvestment process.
  BHARAT PETROLEUM CORPORATION :
In November 2019, the government of India
announced the disinvestment of 5 public sector units
(PSUs), which included cutting the majority stake in
B h a r a t P e t r o l e u m C o r p o r a t i o n o f I n d i a ( B P C L ) . Th e
government also announced its 31% stake sale plans in
Container Corporation of India.
 SHIPPING CORPORATION OF INDIA :
EXAMPLES The government on 22 nd December 2020
invited bids to sell its 63.75 percent stake in SCI, along
with transfer of the management control. The deadline to
submit the initial bid had been set for 13 th February
2021. 
THANK YOU
TAKE OVER
• Meaning
Take over is very similar to an acquisition where one company
purchases another for an agreed some in cash or number of shares

TAKEOVER = To buy a ownership of a company

 EXAMPLES
1.ADHANI GROUP Takeover ocean sparkle
• Adani group acquires 100% stake in marine services company Ocean
Sparkle . Ocean Sparkle Ltd is valued at an enterprise value of Rs1,700 crore with a
cash flow of Rs 300 crore.
• The Adani Harbour Services Ltd (“TAHSL"), has entered into an agreement for
Takeover of 100% stake in Ocean Sparkle Ltd (‘OSL’), India’s leading third party
marine services provider. Key activities carried by the company include towage,
pilotage, and dredging.
2. ADHANI GROUP TAKEOVER AMBUJA
& ACC CEMENT
• Deal will catapult Adani Cement as the second-largest cement maker in the
country
• Adani Group has takeover to controlling stake in Swiss major Holcim’s India
business, the Ambuja Cement-ACC combine, for $10.5 billion in a fiercely-battled
bidding process that saw participation from large players, including Sajjan Jindal-
backed JSW Cement and Aditya Birla Group’s UltraTech Cement.
• After the whole process of bidding then Adani group takeover 100% stake on
AMBUJA & ACC cement
3. TATA MOTORS TAKEOVER FORD
COM
• Tata Motors takeover the Jaguar Land Rover businesses from Ford Motor
Company for a net consideration of US $2.3 billion, as announced on March 26,
in an all-cash transaction.
• Tata Motors' takeover of Ford India's passenger vehicle manufacturing plant in
Sanand, 40 km from Ahmedabad .
4. ELONMUSK TAKEOVER TWITTER
• Elon Musk’s $44.2 billion Twitter takeover is one of the biggest tech takeover of
all time. Here’s where the billionaire’s deal ranks in tech history.
• He’s an entrepreneur used this platform for promotion to all the companies
5. KRAFT FOODS TAKEOVER CADBURY
• Kraft foods try to buy Cadbury and the proposal was rejected.
• So KRAFT FOODS they think to takeover Cadbury.
• In 2010 for 21.8B$ it takeovers the Cadbury buy acquiring all shares.
• Kraft foods takeover the Cadbury for marketing purpose
THANK YOU
Joint Venture ..
A joint venture it is an AGREEMENT between two/more business entities come
together to form a new business & they also share all profits & losses.

Reason behind Joint Venture …

The reasons behind a joint venture include business expansion, development of
new products or moving into new markets .
EXAMPLES…
1. SONY JV WITH ERICSSON
A 50:50 joint venture It created Sony Ericsson, a famous mobile handset brand of
that period. Ericsson was a mobile handset maker and Sony had the technology.
This JV gave the organization the capacity to compete with leading companies like
Nokia and Apple.
2. UBER JV WITH VOLVO
joint venture between the taxi giant UBER and the heavy vehicle manufacturer
Volvo. The joint venture goal was to produce driverless cars The ratio of ownership
is 50%-50%. The business worth was $350 million as per the agreement in the joint
venture.
The driverless cars partnership made by the Swedish-based carmaker, owned by
China’s Geely, and ride-hailing service Uber pool resources into initially developing
the autonomous driving capabilities of its flagship XC90 SUV. The investment will
be roughly shared equally by the two companies.
3. CAFE COFFEE DAY JV WITH IMPACT
HD
Café Coffee Day Global Limited have announced a joint venture with Impact HD
Inc.,  Japan’s largest sales floor support service company and the only one-stop-
shop company in Japan to  provide all requirements in field marketing related
services.
Impact HD inc having 49% then remaining 51% owned by CCD it’self.
4. KYB JV WITH YAMAHA MOTOR CYCLE
KYB established a company in India in December 2012 for the manufacture and
sale of hydraulic shock absorbers for motorcycles. In 2014, this company plans to
start supplying hydraulic shock absorbers for motorcycles to the Chennai Factory of
India Yamaha Motor Pvt. Ltd. KYB goal is to use its company in India to
manufacture and sell products that are cost competitive and rank among the best in
the world. In July 2013, KYB plans to have its company in India issue stock for sale
to Yamaha Motor. This sale will make the joint venture that will be 60% owned by
KYB and 40% owned by Yamaha Motor.
5. SAMSUNG JV WITH SPOTIFY
In 2018, Samsung and Spotify a Joint deal to make it easier to use Spotify on
Samsung devices. A year later they expanded that agreement and began including
Spotify as a pre installed app on many Samsung phones – even giving consumers
six months free. 
6. BMW JV WITH Louis Vuitton
This was a luxury venture by both companies. BMW had introduced a hybrid BMW
i8 car into the luxury market. Vuitton already is a well-known brand in the luxury
goods sector. Vuitton created luxury handcrafted leather bags to fit the BMW i8
luggage space. This venture was created to offer the customers the luxury effect of
having a BMW i8, more of a show-off for the ultra-rich. However, the purpose of a
JV is to provide opportunities for both companies to gain profits from each other’s
product.
THANK YOU
STRATEGIC ALLIANCE
MEANING:

 A strategic alliance is an arrangement between two companies to undertake a

mutually beneficial project while each retains its independence.

 The alliance is a cooperation or collaboration which aims for a synergy where each
partner hopes that the benefits from the alliance will be greater than those from
individual efforts.

 Typically, two companies form a strategic alliance when each possesses one or more
business assets or have expertise that will help the other by enhancing their
businesses.

 Strategic alliances occur when two or more organizations join together to pursue
mutual benefits.
 TYPES OF STRATEGIC
ALLIANCES:
• There are three types of strategic alliances:
1. Joint Venture
2. Equity Strategic Alliance
3. Non-equity Strategic Alliance.
1 .Joint Venture:
• A joint venture is established when the parent companies establish a new child company. For
example, Company A and Company B (parent companies) can form a joint venture by
creating Company C (child company).
• In addition, if Company A and Company B each own 50% of the child company, it is defined
as a 50-50 Joint Venture. If Company A owns 70% and Company B owns 30%, the joint
venture is classified as a Majority-owned Venture.
2 .Equity Strategic Alliance :
• An equity strategic alliance is created when one company purchases a certain equity
percentage of the other company.
For example, If Company A purchases 40% of the equity in Company B, an equity strategic
alliance would be formed.
3. Non-equity Strategic Alliance:
• A non-equity strategic alliance is created when two or more companies sign a contractual
relationship to pool their resources and capabilities together.
• Non-equity partners do not become owners of the firm they invest in, do not have full voting
rights, and are not expected to contribute capital.
• In this type of alliance, firms do not establish an independent company (joint venture) and
do not take equity positions (equity strategic alliance). This also means that non-equity
strategic alliances are less collaborative and demand fewer commitments.
Example:
1. Partnership between Starbucks and Kroger.
2. Maruti-Suzuki alliance in India.
 EXAMPLE
S:
1. Strategic Partnerships between Spotify and Uber:

The alliance between Spotify and Uber is an example of a strategic alliances between two
companies. These two companies, through this alliance, increasing their customer base as they
offer uber riders to take control of the stereo.
In this way, both companies are getting an edge over their competitors. Customers of Spotify
can play their favorite playlist while riding in the Uber ride by getting the premium package of
Spotify.
• 2. Apple Pay and Master Card:

 When Apple Inc. decided to get into digital payment business. It became a big competitor to
all existing companies in this field.
 Rather than getting into the competition, the second-largest digital payment company
“Master Card” decided to get into an alliance with the Apple Inc. in this way, both
companies getting the benefit of the alliance.
 Master Card become the first company to provide Apple Pay’s services, and Apple Pay got
the benefit of the Master Card’s reputation.
3. Google and Luxottica:

 Luxottica is a leading luxury and sports eyewear company, and Google is an international
company which provides internet-based services and products. There is no way that one can
think of two such different companies getting into a business alliance with each other.

 But these two companies get into an alliance to set an example in the market. With each
other’s alliance companies are both companies expanded their business by combining
technology with luxury.
4.Red Bull and GoPro:

 In 2012, Red Bull partnered with GoPro to support a record-breaking skydive from a
balloon. Red Bull sponsored the dive, and the skydiver wore a GoPro camera to capture it.
 The two brands later formed a long-term strategic alliance for Red Bull extreme sports
events, such as the Red Bull Rampage. Only GoPro cameras are used to capture an athlete’s
point-of-view shots at these events.
 The Red Bull/GoPro strategic partnership is so successful because the brands have similar
adrenaline-seeking audiences. Thanks to this strategic alliance, both brands now have an
even stronger association with high-level thrills.
5. VODAFONE INDIA AND ICICI BANK:

 The partnership between Vodafone India and ICICI Bank is a prominent strategic alliance
example.
 The two organizations joined forces to launch m-pesa, a mobile money transfer and
payments service that helps customers access a wide range of offerings, including cash
deposit and withdrawal, money transfer and mobile recharge. ICICI Bank gained access to
Vodafone India’s extensive market reach. At the same time, Vodafone India utilized ICICI
Bank’s technological innovation in banking to deliver a unique offering to its customers in
the form of secure financial transactions.
FRANCHISING
DEFINITION AND
EXAMPLE
FRANCHISING DEFINITION:

Franchising is a business relationship between two entities

wherein one party allows another to sell its products and
intellectual property.
There are three main types of franchises :
• Most franchises fall under the business format type where the
franchisor licenses a business format, operating system, and
trademark rights to its franchisees.
• The second type of franchise is product distribution, which is
more of a supplier-dealer setup. The franchisor grants the
franchisee permission to sell or distribute a product using their
logo, trademarks and trade name, but typically does not provide
an operating system to run the business.
• The third is manufacturing, where the franchisor permits the
franchisee to manufacture their products (e.g. clothing) and sell
them under its trademarks.
106
KEY POINTS:
•A franchise is a legal contract that provides a
third party the use a business’s brand name
and image.
•The franchisee pays a percentage of their
profits to the franchisor
Example:
McDonald's.
Dominos.
KFC.
Pizza Hut.
Subway.
Dunkin' Donuts.
Taco Bell.
Baskin Robbins.
107
Mcdonalds franchise:
McDonalds franchise has been giving the development licensee status and in
India which is as of now in the hands of two entrepreneurs Amit Jatia, Vice
Chairman, Hardcastle Restaurants Pvt. Ltd for West and South India and
Vikram Bakshi's Connaught Plaza Restaurants Private Limited for North and
East India.

It contains fundamentals of cost, area, training, operations, and the

progressing expenses required in working a McDonald's franchise. The
document contains a great deal of lawful and business terms, so on the off
chance that you don't have a broad foundation in law or business you might
need to employ a business or corporate lawyer to help you interpret the FDD.
You need to ensure you completely comprehend your rights and
responsibilities before focusing on a franchise.

108
JAWED HABIBA FRANCHISE:
Jawed Habib is one of the leading hair & beauty salon chains at present in
India. The company currently operates a total of 545 outlets across 24 states
and 110 cities in the country. The company is promoted by Jawed Habib, a
renowned Hair Expert in India.

BATA:
Bata is the largest retailer and manufacturer of footwear in India and was
organised as the Bata Shoe Company Private Limited in 1931. It was the first
production plant in the Indian shoe manufacturing sector to get an ISO: 9001
certification.

109
APOLLO DIGNOSTICS:
Apollo, India’s first name in corporate healthcare, ‘Good health for all’ is the
abiding focus. Recognising the need for high-quality diagnostics to nip
developing health problems in the bud, Apollo offers a wide spectrum of tests
through its hospital and clinic facilities across the Country.
To expand the offering and increase its accessibility to a wider network of
patients and doctors, Apollo Hospitals launched Apollo Diagnostics, a service
fully dedicated to providing diagnostics for all age groups.

BAJAJA AUTO:
Bajaj is a highly established prestigious two wheeler brand in India. The brand
that has been in existence for many decades now is considered highly
competitive and reliable. The Pulsar and Discover model bikes of Bajaj have
swept the market with such high tide there are no equivalent bikes till date.

110
THANK YOU!
Slump sales

Meaning
slump sales for income tax purpose would be where an
undertaking is sold without considering the individual values of
the assets or liabilities contained within the undertakings
Examples of slump sales
 PATANJALI : Patanjali sold its biscuits factory business to the
Ruchi Soya company for the lump sum amount of 60.2 Crore INR
 JSW ACQUIRES WELSPUN CORP : JSW steels acquires high
grade steel plants from Welspun corp at 225 Cr INR on March 2021
 YAHOO : Yahoo again sold to a private firm in US from its owner
Verizon for a deal of $3.6 Billion
 ADANI POWER: Adani Power sells Mundra Power to its
subsidiary on a slump sale and creats Adani Power(Mundra)
1.Patanjali
  Patanjali Ayurved Ltd will sell its food retail business to group firm
Ruchi Soya Industries Ltd for Rs 690 crore as part of its strategy to
focus on non-food, traditional medicine and wellness business.
 Patanjali Ayurved Ltd had acquired Ruchi Soya through an
insolvency process.
 In a regulatory filing, Ruchi Soya informed that it has entered into a
"Business Transfer Agreement" with Patanjali Ayurved Ltd to
acquire the food retail business of the latter as a going concern on a
slump sale basis.
2.JSW acquires Welspun corp
 JSW Steel has completed the acquisition of the steel plate and
pipe business of Welspun Corp by paying the last tranche of ₹86
crore.
 In April, the company had announced acquisition of high-grade
steel plates and coils business of Welspun on a slump sale basis
for ₹848 crore.
3.YAHOO
 Yahoo again sold to a private firm in US from its owner Verizon
for a deal of $3.6 Billion.
 After its revenues began shrinking following its peak in 2007,
Yahoo was acquired by Verizon (VZ) for $4.5 billion in 2017,
where it now operates alongside brands like HuffPost and Tumblr
under the umbrella once called “Oath”- recently retooled as
“Verizon Media.” Confusingly, Oath and Verizon Media both
currently exist, and therefore sites like Yahoo are effectively
being run by two different companies. This has lead to
disorganized management.
4.ADANI POWER
 Adani Power’s plans to separate its ailing asset, the 4620 MW
coal-based power plant in Mundra, by slump sale to its
subsidiary, Adani Power (Mundra) Ltd, will take time as the
transaction has not got necessary regulatory approvals.
THANK YOU