They are Horizontal Merger, Conglomeration, Vertical Merger, Product -Extension Merger and Market-Extension Merger.

Horizontal Merger refers to the merger of two companies who are direct competitors of one another. They serve the same market and sell the same product. Conglomeration refers to the merger of companies, which do not either sell any related products or cater to any related markets. Here, the two companies entering the merger process do not possess any common business ties. Vertical Merger is effected either between a company and a customer or between a company and a supplier. Product-Extension Merger is executed among companies, which sell different products of a related category. They also seek to serve a common market. This type of merger enables the new company to go in for a pooling in of their products so as to serve a common market, which was earlier fragmented among them. Market-Extension Merger occurs between two companies that sell identical products in different markets. It basically e xpands the market base of the product. PROCEDURE OF MERGER

1.

Observing Memorandum of Association of Transferee Company.

It has to be ensured that the objects of the MOA of the transferee company cover the objects of the Transferor Company or companies. I f not then it will be necessary to follow the procedure for amendment of objects by passing a special resolution at an EGM convened for this purpose.It has been held by various decisions of the courts that there is no necessity to have special power in the object clause of the MOA of a company for its amalgamation with another company. It has been laid down that to amalgamate with another company is power of the company and not an object of the company.

2. Convening a Board Meeting Board Meeting is to be convened and held to consider and approve in principle amalgamation and appoint an expert for valuation of shares to determine the share exchange ratio. Consequent upon finalization of scheme of amalgamation anther Board Meeting is to be held to approve th e scheme. 3. Preparation of Valuation Report Chartered Accountants are requested to prepare a Valuation Report & the swap ratio for consideration by the Boards of both the companies and if necessary it may be prudent to obtain confirmation from merchant ba nkers on the valuation to be made by the Chartered Accountants.

4.Preparation of scheme of amalgamation or mergerAuditors, legal advisors and Practicing Company Secretary of both the companies must interact with each other and should report the result of their interaction to their respective BOD. The Boards of the involved Companies should discuss and determine details of the proposed scheme of amalgamation and merger. The draft of the scheme finally prepared by the Boards of both the companies should be e xchanged and discussed in their respective Board meetings. After such meetings a final draft scheme will emerge.
Hr issues in m & a.
1. 2. 3. 4. 5. 6. 7.

An inability to sustain financial performance Loss of productivity Incompatible cultures Loss of key talent A clash of management styles An inability to manage / implement change Objectives / synergies not being well understood