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1. Post- liberalization, most Indian business houses are undergoing major structural
changes, the level of restructuring activity is increasing rapidly and the
consolidations through M&A have reached every corporate boardroom.
2. Most of the mergers that took place in India during the last decade seemed to
have followed the consequence of mergers in India corroborate the conclusions
of research work in U.S. with most of the M&A are taking place in India to
improve the size to withstand international competition which they have been
exposed to in the Post-liberalization regime.
3. The M&A activity is undertaken with the objective of financial restructuring and
to avail of the benefits of financial restructuring. Nowadays, before financial
restructuring, it has become a pre-requisite that companies need to merge or
acquire. Moreover, financial restructuring becomes easier because of M&A. the
small companies cannot approach international markets without becoming big
i.e. without merging or acquiring.
The merger would enhance the value for SBI shareholders through the merged entity’s
access to low-cost deposits, greater opportunities for earning fee-based income and the
ability to participate in the payment system and provide transaction-banking services.
The merger was Approved by shareholder of SBI and SBI Bank in January
2002, by the high court of Gujarat at Ahmadabad in April 2002.Consequent to the
merger, the SBI group’s financing and banking operation, both wholesale and retail,
have been integrated in a single entity.