Professional Documents
Culture Documents
Group Members
Aabha Amatya
Barsha
Shrestha
Durga Dulal
Milan Adhikari
Pooja Neupane
Punisha Tandukar
So
Last
the
After
Acquisition
When one company takes over another and clearly
established itself as the new owner, the purchase is
called an acquisition.
In an acquisition, the acquiring company obtains the
majority stake in the acquired firms, which does not
change its name or legal structure
From a legal point of view, the target
company chooses to exist, the buyer "swallows" the
business and the buyer's stock continues to be traded.
Nepalese Perspective
Liberalization
Financial
Institutions
Number
Number Of
Branches
Commercial Banks
32
1423
Development Banks
88
687
Finance Companies
69
246
After merger
Financial Institutions
Number
Commercial Banks
Development Banks
Finance Companies
42
Statutory Merger:
A statutory merger is one in which all the
assets and liabilities of the smaller
company is acquired by the bigger
(acquiring) company
Company A + Company B = Company A
Subsidiary Merger:
A subsidiary merger is one in which the
target company becomes a subsidiary of the
bigger acquiring company.
Company A + Company B = (Company A +
Company B)
Consolidation:
A consolidation merger is one in which
both the companies lose their identity as
separate entities and become a part of a
bigger new company.
Company A + Company B = Company C
Horizontal Merger:
A merger that happens between companies
belonging to the same industry.
The companies have businesses in the same space
and are generally competitors to each other
The motivation behind such merger is economies
of scale and control of bigger market share.
Vertical Merger:
A vertical merger is a merger between companies
that produce different goods or offer different
services for one common finished product.
Backward Integration: A vertical integration
where a company acquires the suppliers of its
raw materials.
Forward Integration: A vertical integration
where a company acquires the distribution
channels of its products.
Conglomerate Merger:
A merger between companies that operate
in completely different and unrelated
industries. A pure conglomerate merger is
between companies with totally nothing in
common.
A mixed conglomerate merger is between
companies looking for market or product
extensions.
Cutting
costs
Increasing
capabilities.
Replacing
leadership
Reasons
of
Merger
Diversifying
Survival
Competitive
advantage
Mega
Success and
Failure
of Merger
Success of Merger
I.
II.
III.
IV.
Failure of Merger
I.
II.
III.
IV.
V.
Flawed Intention
No common vision
Ignorance
Poor program management
Weak leadership