STRATEGIC

MANAGEMENT

ASSIGNMENT
WORK

MERGERS AND
ACQUISITIONS
SURAJ
[INTRODUCTIONS]
RAVI
[MEANING]
PARVEZ
[TYPES OF M&As]
SATISH
[RECENT DEVELOPMENT
IN INDIA]
SAMEER
[MOTIVES FOR M&As]
INTODUCTIONS OF MERGERS
AND ACQUISITIONS

Mergers and acquisitions have long been

a topic of keen interest to researchers in
management, economics, and finance on account
of its role in the transformation of the industrial
structure of the advanced economies.
A large number of research studies have
been carried out abroad especially, in the
developed capital markets of USA, UK,
FRANCE, CANADA, and AUSTRALIA. These
studies have focused on.
1} types and motives of mergers and
acquisitions,
2} impact of M&As on performance of
corporate enterprises,
3} impact of M&As on shareholder wealth, and
4} problem of post M&As integration etc.
MEANING OF MERGERS AND
ACQUISITIONS
Mergers refer to the merging of one
company into another or two companies getting
merged to form a new corporate entity. A
merger is popularly understood to be a fusion of
two companies. Acquisitions or take over
denotes a company acquiring controlling stake
in another so that the acquirer can have
management control over the other firm.
Mergers are different form acquisitions.
Acquisitions implies that a company unilaterally
relinquishes its independence and adapts to
another firm’s plans, while in mergers , all
combining firms relinquish their independence
and cooperate, resulting in common corporation
Generally, acquisitions is the purchase by one
company of a substantial part of the assets or
securities of another (acquisitions and takeovers
are used as synonyms in this study.
 TYPES OF MERGERS AND
ACQUISITIONS
The mergers and acquisitions have been
broadly categorized into HORIZONTAL,
VERTICAL, and CONGLOMERATE types. A
horizontal merger takes place between two or
more companies that compete in the same
business and geographical market. A vertical
merger integrates the operations of a supplier
and a customer. In a back ward vertical merger,
customer acquires the supplier, while, in a
forward vertical mergers, the supplier acquires
the customer. A conglomerate merger is one
between firms totally unrelated business
.Further, consolidation merger takes place
between two or more firms, generally engaged
in same or similar business under the control of
same management. A detailed study has been
given in the following paragraphs.
MOTIVES FOR MERGERS AND
ACQUISITIONS
The major driving forces for conglomerates style
M&A are strategic considerations which includes, to
compensate for instabilities of mature industries with
wide fluctuations in demand and product mix; excess
capacities related to slow sales growth and declining
profits margins; entry of competitive firms and major
long term decline in some markets.
Here the strategic forces aim at getting a bigger
size of the market, enhancing product mix through
R&D, to achieve economies of scale and synergy,
strengthening ownership control and guarding against
acquisitions. By adopting these strategic
considerations companies expected to focus on their
core competencies through core consolidation and stay
competitive.