Mergers & AcquisitionsAndIHRMInorganic growth

Company Name

ContentsIHRM and M&ASector wise M&A Ways of M&ATypes of M&AMeaningsReasonsCase studies

Merger :-Merger is defined as a combination of two or more independent business corporations into a single enterprise. Like RNRL was merged in Rpower, hence jointly created market capitalization of 50k crores.

Acquisition:- In acquisition, One company acquires another company. Like GOOGLE acquired MOTOROLA. So, GOOGLE became the owner of MOTOROLAMeaning

Types of M & AHorizontalVerticalConglomerate Exxon - MobilRNRL and RPOWERFirms in different stages of production operation. Sesa goa and Crain India

Ways of M&A

Reasons for M & ATo increase market powerTo overcome barriers to entryTo lower cost and risk of new product developmentTo diversify businessTo increase the financial strengthTo access in new markets and technologies

M&AREGULATORY FRAMEWORKTRANSACTION STRUCTURE Companies Act Income Tax Act Competition Act

FOR LISTED COMPANIES SEBI Regulations Stock Exchange Listing Agreement

FOR FOREIGN- M&A ACTIVITY Foreign Exchange Management Act

Government plays very important role during international M&A activity.

Case study Unsuccessful MergerIn 1998 Mercedes Benz(German) and Chrysler(American) companies got mergedSoon in early 2001 the losses occurred heavily, the reason was the cultural differences between both the companiesBenz focused heavily on quality while Chrysler on cost effectivenessFinally in 2007 the deal was called off and Chrysler was sold

Case study of successful company in AcquisitionSuzlon - A leading wind turbine manufacturerSuzlon acquired 91% stake in REpower, a Germany-based company in May 2007 for 1200 million EurosSuzlon became 5rd largest wind turbine manufacturer after REpower acquisitionIt got significant market share in Europe and USSales of Suzlon Grew by 2.5 times after REpower acquisition

Why Merger Fails???Inability to integrate people into a new cohesive new entityInability to make cultural integrationAttitudinal problemLack of commitment and trust and moral

Implications in M&A

Employee Concern Matters

How to make M&A SuccessfulCreating synergy between cultures such that employee at every level get satisfiedBy calling meeting sharing ideas of the employees of both the companiesUsing MBOOrganizing Pre-merger meetingCommunicating that why merger is necessaryCommunicate creative, open, frequent upcoming changes

Sector wise M&A activityFMCG:- TATA Tea acquired TetleyKRAFT foods acquired CadburyIT :- Facebook acquired Whats AppHp acquired MphasisGoogle acquired YouTube.METALs:- Hindalco acquired NovelisVedanta resources acquired Hindustan zinc and BALCO.

Sector wise M&A activityTelecom:- Vodafone acquired Hutchison-essarIDEA acquired Spice telecomPharma:- Reckitt Benckiser acquired Paras pharma( moov )EMAMI acquired Zandu pharma Sun Pharma Acquired Controlling Stake in Taro Daiichi - Sankyo acquired Ranbaxy

Sector wise M&A activityAutomobiles:- TATA motors acquired jaguar and land rover M&M acquired Ssang yong

Airlines:-Kingfisher took over Deccan airlines

Prepared by

Abdul Hadi SultaniAakash ParekhJasmeen Changani

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