This document provides an overview of mergers and acquisitions. It defines mergers as a transaction where two firms integrate operations on an equal basis to create stronger competitive advantages. Acquisitions involve one company being bought by another. The document outlines key differences between mergers and acquisitions. It also discusses reasons for mergers and acquisitions as well as potential problems. Several major merger and acquisition deals are presented as examples. The process, impacts, and reasons for failure of mergers and acquisitions are summarized.

1. Mergers and
Acquisitions

2. Presented by:
Danyal Mustafa
&
Sartaj Sangi

3. A brief Introduction
Danyal Mustafa
Shaikh

4. Outlines:
•What is Mergers?
•What is Acquisitions?
•Difference between Mergers and Acquisitions.
•Why merger is important and problems with Merger.
•Why Acquisition is important and problems with
Acquisition.
•Experience in Mergers and Acquisitions.
•Some Examples.
•Process of mergers and acquisition.
•Impact of Mergers and Acquisition.
•Why Mergers and Acquisition Fail.

5. What is MERGER?
• A transaction where two firms agree to integrate
their operations on a relatively co-equal basis
because they have resources and capabilities that
together may create a stronger competitive
advantage.
• Example:
Company A+ Company B= Company C.

6. What is ACQUISITION?
• It also known as a takeover or a buyout
• It is the buying of one company by another.
• In acquisition two companies are combine together to form a
new company altogether.
• Example:
Company A+ Company B= Company A.

7. DIFFERENCE BETWEEN MERGER AND
ACQUISITION
ACQUISITION
MERGER
i.
Merging of two organization in
to one.
ii. It is the mutual decision.
iii. Merger is expensive than
acquisition(higher legal cost).
iv. Through merger shareholders can
increase their net worth.
v. It is time consuming and the
company has to maintain so
much legal issues.
i.
Buying one organization by
another.
ii. It can be friendly takeover or
hostile takeover.
iii. Acquisition is less expensive
than merger.
iv. Buyers cannot raise their
enough capital.
v. It is faster and easier
transaction.

8. PROCESS OF MERGER & ACQUISITION
The process of merger and acquisition has the following steps:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Approval of Board of Directors
Information to the stock exchange
Application in the High Court
Shareholders and Creditors meetings
Sanction by the High Court
Filing of the court order
Transfer of assets or liabilities
Payment by cash and securities
Maximum Waiting period:210 days from the filing of
notice(or the order of the commission - whichever earlier).

9. Why Mergers and Acquisitions Fail?
• Cultural Difference
• Flawed Intention
• No guiding principles
• No ground rules
• No detailed investigating
• Poor stake holder outreach

10. MERGER:WHY & WHY NOT
WHY IS IMPORTANT
i. Increase Market Share.
ii. Economies of scale
iii. Profit for Research and
development.
iv. Benefits on account of tax
shields like carried forward
losses or unclaimed
depreciation.
PROBLEM WITH MERGER
i. Clash of corporate
cultures
ii. Increased business
complexity
iii. Employees may be
resistant to change
10

11. ACQUISITION:WHY & WHY NOT
WHY IS IMPORTANT
i. Increased market share.
ii. Increased speed to market
iii. Lower risk comparing to
develop new products.
iv. Increased diversification
v. Avoid excessive
competition
PROBLEM WITH ACUIQISITION
i. Inadequate valuation of
target.
ii. Inability to achieve
synergy.
iii. Finance by taking huge
debt.

12. For further..
Sartaj Sangi

13. M&A DEALS…

14. 1. Tata Steel-Corus: $12.2
billion
• January 30, 2007
• Largest Indian take-over
• After the deal TATA’S
became the 5th largest
STEEL co.
• 100 % stake in CORUS
Image: B Mutharaman, Tata Steel MD; Ratan
Tata, Tata chairman; J Leng, Corus chair;
and P Varin, Corus CEO.
paying Rs 428/- per
share

15. 2. Vodafone-Hutchison
Essar: $11.1 billion
Image: The then CEO of Vodafone
Arun Sarin visits Hutchison
Telecommunications head office in
Mumbai.
• TELECOM sector
• 11th February 2007
• 2nd largest
takeover deal
• 67 % stake holding
in hutch

16. 3. ONGC-Imperial
Energy:$2.8billion
Image: Imperial Oil
CEO Bruce March.
• January 2009
• Acquisition deal
• Imperial energy is a
biggest chinese co.
• ONGC paid 880 per
share to the
shareholders of
imperial energy
• ONGC wanted to tap
the siberian market

17. 4. HDFC Bank-Centurion
Bank of Punjab: $2.4 billion
•
•
•
•
Image: Rana Talwar (rear) Centurion
Bank of Punjab chairman, Deepak
Parekh, HDFC Bank chairman.
February, 2008
Banking sector
Acquisition deal
CBoP shareholders
got one share of
HDFC Bank for every
29 shares held by
them.
• 9,510 crore

18. 5. Tata Motors-Jaguar Land
Rover: $2.3 billion
• March 2008 (just a
year after acquiring
Corus)
• Automobile sector
• Acquisition deal
• Gave tuff competition
to M&M after signing
the deal with ford
Image: A Union flag flies behind a
Jaguar car emblem outside a
dealership in Manchester, England.

19. EXPERIENCES IN M&A
•
•
•
•
Learn from mistakes of others
Define your objectives clearly
Complete strategy to achieve goal.
SWOT analysis for the merged business - a
must
• Pick holes in strategy to get the best
• Will merged units be able to work at efficient /
ideal level?

20. Sector
Value in USD Share in per
No. of Deals
million
cent
Telecom
3
22732.26
67.19
Pharmaceutical
4
3958.29
11.02
2651.54
7.84
Deals in India for first
BFSI
6
financial quarter 2010
Metal and Mining
4
1483.15
4.38
Energy
4
1320
3.90
Other sectors
39
1919.00
5.67

21. Impact of Mergers and Acquisitions
Employees
Shareholders
Competition
Impact
Public
Management

23. How to Prevent the Failure
• Continuous communication – employees, stakeholders,
customers, suppliers and government leaders.
• Transparency in managers operations
• Capacity to meet new culture higher management
professionals must be ready to greet a new or modified
culture.
• Talent management by the management

24. MERGER & ACQUISITION(2010-11) :
24

25. THANK YOU 