Mergers and Acquisitions

Mergers and acquisitionsPresented by:APRESENTATION ONRESON FOR FAILURE OF MERGER &ACQUISITION DEALS

Definition of 'Mergers And Acquisitions A general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.

Example: Company A+ Company B= Company C.Example: Company A+ Company B= Company A.

Mergers and Acquisitions Types

HorizontalVerticalConglomerate Congeneric

Reasons for Mergers and Acquisitions Capacity Economies of Scale Accessing technology or skills Tax reasons

Gaining Cost Efficiency

Reasons for Failure of Mergers and AcquisitionsSize IssuesDiversificationCultural DifferenceUnproductive work practices No ground rulesNo detailed investigating Employees may be resistant to change

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

How to Prevent Failure

SUCCESSFUL M&A DEALS

Tata Steel-Corus: $12.2 billion January 30, 2007Largest Indian take-overAfter the deal TATAS became the 5th largest STEEL co.100 % stake in CORUS paying Rs 428/- per share

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Tata Motors-Jaguar Land Rover: $2.3 billion March 2008 (just a year after acquiring Corus)Automobile sectorAcquisition dealGave tuff competition to M&M after signing the deal with ford

HDFC Bank-Centurion Bank of Punjab: $2.4 billionFebruary, 2008Banking sectorAcquisition dealshareholders got one share of HDFC Bank for every 29 shares held by them.9,510 crore

Failure of m&a deal.

AT&T -T-Mobile for $39 billion

on march 2011, AT&T announced that it would purchase T-MOBILE USA

on august 2011,the antitrust division of US department of justice announce that it would seek to block the takeover Apollo Tyres Ltd- Cooper Tire & Rubber Co ; $2.5 billion

its a largest deal in indias automobile and tyre industryeBay-Skype;$2.6 billion

eBay and Skype were unable to successfully integrate their technological systems, according to PC World.

Conclusion From the above discussion, we concluded that the mergers and acquisitions have emerged as a positive tool for the growth of the Banking sector as well as for the companies also. Business firms now have to face increased competition not only from firms within the country but also from international business giants thanks to globalization, liberalization, technological changes, etc. Making the mergers work successfully is not that easy as here we are not only just putting the two organizations together but also integrating people of two organizations with different cultures, attitudes and mindsets. While making the merger deals, it is necessary not only to make analysis of the financial aspects of the acquiring firm but also the cultural and people issues of both the concerns for proper post-acquisition integration