Professional Documents
Culture Documents
Merger
Merger refers to a situation when two or more
existing firms combine together and form a new
entity. Either a new company may be
incorporated for this purpose or one existing
company (generally a bigger one) survives and
another existing company (which is smaller) is
merged into it. Laws in India use the term
amalgamation for merger. It is done in two ways
Merger through absorption
Merger through consolidation
Types of Merger
Horizontal merger
Vertical merger
It is a merger which takes place upon the
combination of two companies which are
operating in the same industry but at different
stages of production or distribution system.
If a company takes over its supplier/producers of
raw material, then it may result in backward
integration of its activities
Ex: Merger of Reliance Petro Chemicals Ltd with
Reliance Industries Ltd is a Back ward
Integration
Co generic Merger
Conglomerate merger
Acquisition
Acquisition refers to the acquiring of
ownership right in the property and asset
without any combination of companies.
Thus in acquisition two or more companies
may remain independent, separate legal
entity, but there may be change in control
of companies
No of M7As across
the globe
2003
61
2004
78
2005
110
2006
151
2007
188
2008
256
Target
Date
Tata Steel
Corus
Jan 2007
Hindalco
Novelis
Feb 2007
ONGC Videsh
Imperial Energy
Aug 2008
Tata Motors
Jun 2008
Essar Group
Algoma Steel
Apr 2007
Suzlon
Repower
May 2007
United Spirits
May 2007
GMR Infra
Inter Gen
Jun 2008
Tata Chemicals
Jan 2008
HCL Tech
Axon Group
Dec 2008
Wipro
Infocrossing
Aug 2007
Rain Commodities
Cll carbon
Jul 2007
Essential of Successful
Merger & Acquisition
There are more failed acquisitions than
successes, and numerous factors
influence whether an acquisition/merger
succeeds or fails.
A broad set of strategic factors must be
considered to make reasonable judgments
on whether to move forward.