AMALGAMATION / MERGER OF COMPANIES

B A LB H A R A T I C O LLE G E

Submitted to Prof.

AARTI CHIKAL T.Y.B.M.S.

By, SHASHANK SARFARE 06 VIDHI VORA 07 DHAVAL SALLA 09

Introduction to Amalgamation / Mergers .

AMALGAMATION "blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings. There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company.

Example

X X

Y Y

Z X

Purpose of Amalgamation/Merger.
(1)Procurement of supplies:

(2)Revamping production facilities:

(3) Market expansion and strategy:

(4) Financial strength:

(5) General gains:

Types of Amalgamation/Merger.

(A) Vertical combination:

(B) Horizontal combination :

(C) Circular combination:

(D) Conglomerate combination:

Procedure for Amalgamation/Merger.

P u b lic a n n o u n ce m e n t: To m a ke a p u b l c a n n o u n ce m e n t a n a cq u i r i re sh a l fo l o w th e fo l o w i g p ro ce d u re : l l l n
A p p o in tm e n t o f m e rch a n t b a n k e r. Use of media for announcement . Timings of announcement .

Forward promptly notice and proceedings of meeting to SEs Report the result of the meeting to Court Move Court for approval of the scheme by filing petition in 7 days in Form 40 Advertise the date of hearing fixed by the court On receipt of Order from High Court, file it with RoC. Proceed on effecting the scheme amalgamation / merger as approved by High Court

Major Laws Involved

SEBI (substantial Acquisition of shares &Takeovers) Regulations 1997. The Securities and Exchange Board of India Act,1992 . Security Contract Regulation Act ,1956 . The Depositories Act,1956. SEBI Disclosure and Investor Protection Guidelines 2000. Securities and Exchange Board of India (Prohibition of Insider Trading Regulation ),1992. Securities and Exchange Board of India (Merchant Bankers) Rules/Regulation 1992. SEBI (Delisting of Securities )Guidelines,2003. Foreign Exchange Management Act,1999. Companies Act,1956.

&

Tech Mahindra Quarterly Income Statement Now that we have net margin of Satyam at 15.10%, we will take the revenue of 1193.50crore and calculate the net profit. From this, we can calculate the Earnings Per Share (EPS) as we have the number of shares. Lets look at some numbers in 4 quarters. Income Statement (In Crore) Sales Turnover Operating Profit Net Profit Dec 09 1,149.90 261.97 165.79 Mar 10 1,163.87 277.53 231.83 Jun 10 1,093.57 191.45 128.32 Sep 10 1,491.77 271.89 183.95 Dec 10 1,181.23 245.56 202.02

Earnings Per Share Reserves Face Value Net Profit Margin Average Margin

13.56 10 14.42% 15 . 10 %

18.95 2,550.02 10 19.92%

10.34 10 11.73%

14.63 10 12.33%

16.05 10 17.10%

Mahindra Satyam Quarterly Income Statement

Income Statement (in Crore) Sales Turnover Operating Profit Net Profit Earnings Per Share Reserves Face Value Net Profit Margin

Sep 08 2,700.52 649.27 597.43 8.87 8,392.23 2 22.12%

Jun 10 1,154.10 108.9 104 0.88 2 9.01%

Sep 10 1,150.80 71.2 28.5 0.24 2 2.48%

Dec 10 1,193.50 82.1 65.8 0.56 2 5.51%

Wh

rge Me y

ils? s Fa r

List of Amalgamated Companies (Success & Failure).

Glaxo India Limited and SmithKline Beecham Pharmaceuticals (India) (Came in to existence on December 2000) [Success]. Deutsche and Dresdner Bank (Came in to existence on 7th March, 2000) [Failure]. London-based Standard Chartered Bank and ANZ Grind lays Bank (Came in to existence on August 2000 ) [Success]. TATA & UK-based TETLEY (Controversial Issue over Success And Failure). (Came in to existence on Feb 2000). But Tata still calls it to be a success whereas in reality it is a Failure.

Bibliography
http://www.managementparadise.com/forums/business-environment-b-e/951mergers-acquisitions.html "Mergers and acquisitions explained". http://www.m-and-a-explained.com/. Retrieved 2009-06-30. Mahindra & Satyam Discuss Transit http://www.mahindrasatyam.com/media/pr7Apr09.asp