Ppt of merger and acquisition
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Transcript of Ppt of merger and acquisition
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PPT of Merger and Acquisition
Shiver katal 13MBA1253
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Merger A merger refers to a combination of two or
more companies, usually of not greatly disparate size, into one company.
A merger involves the mutual decision of two companies to combine and become one entity; it can be seen as a decision made by two "equals".
Merger refers to a situation when two or more existing firms combine together andform a new entity.
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Types of Merger Horizontal MergerHorizontal mergers are those mergers where
the companies manufacturing similar kinds of commodities or running similar type of businesses merge with each other.
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Examples of horizontal mergerLipton India and Brooke Bond.
Bank of Madura with ICICI Bank.
BSES Ltd with Orissa Power Supply Company.
Associated Cement Companies Ltd with Damodar Cement.
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Vertical MergerA merger between two companies producing
different goods or servicesExamples:-Time Warner cable operation- Turner CorporationPixar-Disney Merger
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CONGLOMERATE MERGER
Conglomerate mergers take place when the two firms operate in different industries.
Types of conglomerate mergers:
1.Pure conglomerate mergers involve firms with nothing in common.
2. Mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.
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ExampleWalt Disney Company and the American
Broadcasting Company.
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AmalgamationAmalgamation signifies the transfers of all
are some part of assets and liabilities of one or more than one existing company or two or more companies to a new company.
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AcquisitionWhen one company takes over another and clearly
established itself as the new owner, the purchase is called an acquisition.
Acquisition is generally considered negative in nature
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Acquisitions
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Importance of mergerGrowth and diversificationSynergyFund raisingIncreased managerial skill/technologyTax considerationIncreased ownership liquidityDefense against takeovers
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Challenges to mergers