Due diligence refers to the investigating effort made by an individual to gather all relevant facts and information that

can influence his decision to enter into a transaction or not. Exercising due diligence is not a privilege but an unsaid duty of every party to the transaction. For instance, while purchasing a food item, a buyer must act with due diligence by checking the expiry date, the price, the packaging condition, etc. before paying for the product. It is not the duty of the seller to ask every buyer everytime to check the necessary details. M&A due diligence helps individuals avoid legal hassles due to insufficient knowledge of important details.

Due diligence is integral to business ethics. It is exercised in a simple over-the-counter transaction or a complicated merger and acquisition transaction. For instance, while acquiring a company, the buyer must do thorough research of the credentials of the company, its market valuation, status of accounts receivables, position in the debt market, past performance, etc.

Another area where an individual needs due diligence is while investing funds in a company. The individual should study the previous financial reports to analyze the company's performance. He should check the company background, its promoters, general reputation, and return to the existing shareholders.

Dealing in real estate is a risky business. One of the highest numbers of frauds takes place in this area. A buyer or a seller must investigate the authenticity of the other party. They should also ensure that the property title is clear. Mergers and Acquisitions are important factors and fundamental elements in the global business scenario. They are greatly useful for restructuring the strategies and maintaining a balance of form and formulation.

The entire M&A process is a cumbersome process that needs a lot of understanding as it undergoes a series of procedures that also includes legal requirements. The process includes a thorough analysis of the market, structuring techniques, powerful implementation, and executing the deal. The entire process requires a deep M&A analysis and assessment by qualified and experienced professionals.

Mergers and acquisitions is involved with our clients at every stage of the merger and acquisition process. The qualified professionals offer invaluable inputs and offer a supportive hand before and after the deal.

We offer the following services with regards to merger and acquisition: . Assessment of the business potential . Company valuation . Budgeting and controlling finances . Brand valuation . Preparing the agreement . Structuring strategies . Identification of possible threats and risks . Structuring of tax deal . Evaluation of policies . Sale forecasting . Corporate training

. Implementation of new technologies . Offering enhanced business knowledge . Strategic planning . Specific training on various important models . Establishments of entities . Handling both inbound and outbound transaction . Planning exit Global M&A is one of the most happening and fundamental element of corporate strategy in today's world. Many companies around the world have merged with each other with a motive to expand their businesses and enhance revenue.

In the span of few years there are many companies coming together for betterment across the globe. Recent mergers and acquisitions 2011 are Lipton Rosen & Katz in New York, Sullivan & Cromwell LLP in New York, Slaughter & May in London, Mallesons Stephen Jaques in Sydney, and Osler Hoskin & Harcourt LLP in Toronto.

Even in India merger and acquisition has become a fashion today with a cut throat competition in the international market. There are domestic deals like Penta homes acquiring Agro Dutch Industries, ACC taking over Encore Cement and Addictive, Dalmia Cement acquiring Orissa Cement, Edelweiss Capital acquiring Anagram Capital. All these are recent merger and acquisition 2010 valued at about USD 2.16 billion.

Apart from these there are other successful mergers in India as follows:

Tata Chemicals took over British salt based in UK with a deal of US $ 13 billion. This is one of the most successful recent mergers and acquisitions 2010 that made Tata even more powerful with a strong access to British Salt's facilities that are known to produce about 800,000 tons of pure white salt annually.

Merger of Reliance Power and Reliance Natural Resources with a deal of US $11 billion is another biggest deal in the Indian industry. This merger between the two made it convenient and easy for the Reliance power to handle all its power projects as it now enjoys easy availability of natural gas.

Airtel acquired Zain in Africa with an amount of US $ 10.7 billion to set new benchmarks in the telecom industry. Zain is known to be the third largest player in Africa and being acquired by Airtel it is deliberately increasing its base in the international market.

ICICI Bank's acquisition of Bank of Rajasthan at aout Rs 3000 Crore is a greta move by ICICI to enhance its market share across the Indian boundaries especially in northern and western regions. Fortis Healthcare acquired Hong Kong's Quality Healthcare Asia Ltd for around Rs 882 Crore and is now on move to acquire the largest dental service provider in Australia, the Dental Corp at about Rs 450 Crore. Merger arbitrage is the business of stock trading in companies that are known to acquire takeovers or undergo mergers. The process involves buying a stock at a defined price for immediate sale at a higher price.

There is mainly a hedge fund where all the stocks and shares of merging companies are brought and sold simultaneously to ensure a risk-free profit. A merger arbitrageur who takes care of the stock trading often

takes advantage of this process because stock prices often come down during the merger. Later on when the merger is complete the prices increases and the arbitrageur always take profit of this thin line discrepancy of stock prices.

It is a fairly simple concept with which the offer and the target price often come into action. During the announcement of the merger, the stocks either decreases slightly or the stock of the acquirer jumps significantly. The jump is mainly based on the offer price that is between two extremes: an all cash offer or a pure stock offer. Merger transactions can gives an option of all cash offer or an all stock offer. In certain cases it can also come up as a combination of the two that also includes the existence of debts and bonds in the process.

In this process of price variation and option selection, merger arbitrage is possible. This is because the stock of the target firm is usually de-listed because of its possibility of not reaching the offer price until the deal is finalized. The best way to conduct a merger arbitrage is to purchase the stock after the announcement of the merger and sell it after the deal finalization when the stock reaches the offer price. Strategies play an integral role when it comes to merger and acquisition. A sound strategic decision and procedure is very important to ensure success and fulfilling of expected desires. Every company has different cultures and follows different strategies to define their merger. Some take experience from the past associations, some take lessons from the associations of their known businesses, and some hear their own voice and move ahead without wise evaluation and examination. Following are some of the most essential strategies of merger and acquisition that can work wonders in the process:

The first and foremost thing is to determine business plan drivers. It is very important to convert business strategies to set of drivers or a source of motivation to help the merger succeed in all possible ways. There should be a strong understanding of the intended business market, market share, and the technological requirements and geographic location of the business. The company should also understand and evaluate all the risks involved and the relative impact on the business.

Then there is an important need to assess the market by deciding the growth factors through future market opportunities, recent trends, and customer's feedback. The integration process should be taken in line with consent of the management from both the companies venturing into the merger. Restructuring plans and future parameters should be decided with exchange of information and knowledge from both ends. This involves considering the work culture, employee selection, and the working environment as well. At the end, ensure that all those involved in the merger including management of the merger companies, stakeholders, board members, and investors agree on the defined strategies. Once approved, the merger can be taken forward to finalizing a deal. The number as well as the average size of merger and acquisition deals is increasing in India. During post liberalization, increase in domestic competition and competition against cheaper imports have made organizations merge themselves to reap the benefits of a large-sized company. The merger and acquisition

valuation is the building block of a proposed deal. It is a technical concept that needs to be estimated carefully.

M&A valuation involves determining the maximum price that a buyer is willing to pay to buy the target company. From the seller's point of view, it means estimating the minimum price he wants to take against his business. If there are many buyers, then each one bids a purchase price based on his valuation. Finally, the seller will give the business to the highest bidder.

The use of different valuation techniques and principles has made valuation a subjective process. A conflict in the choice of technique is the main reason for the failure of many mergers. For instance, the asset value can be determined both at the market price and the cost price. Therefore, it is important that the merging parties should first discuss and agree upon the methods of valuation.

Calculating the swap ratio is at the core of the valuation process. It is the ratio at which the shares of the acquiring company will be exchanged with the shares of the acquired company. For instance, a swap ratio of 1:2 means that the acquiring company will provide its one share for every two shares of the other company.

Corporate merger and acquisition is defined as the process of buying, selling, and integrating different corporations with the desire of expansion and accelerated growth opportunities. This kind of association in any form plays an integral role when it comes to business and economy as it results in significant restructuring of a business.

The key objective of corporate mergers and acquisitions is to increase market competition. This can be done in various ways using different methods of merger like horizontal merger, conglomeration merger, market extension merger, and product extension merger. All the types work towards a common goal but behold different characteristics suited to get the best outcome in terms of growth, expansion, and financial performance.

In many significant ways, this kind of restructuring a business proves to be beneficial to the corporate world. It greatly helps to share all resources, skills, talents, and knowledge that eventually increases the wisdom bar within the company. This can further help to combat the competitive challenges existing in the market.

Further to that, elimination of duplicate departments, possibility of cross selling, reduction of tax liability, and exchange of resources are other big time benefits of corporate merger and acquisition. This not only helps to cut the extra cost involved in the operation and gain financial gains but also help to expand across boundaries and enhance credibility. This in the long run help increase revenue and market share, fulfillment of the only desire that drives the growth of M&A. Amalgamation is defined as a simple arrangement or reconstruction of business. It is a process that involves combining of two or more companies as either absorption or as blend. Two or more companies can either be absorbed by an entirely new firm or a subsidiary powered by one of the basic firm. In such cases all the shareholders of the absorbed company automatically become the shareholders of the ruling company as the amalgamating company loses its existence. All the assets and liabilities are also transferred to the new entity.

Amalgamation has given different forms to different actions in due course of the merger taking place. It can either be classified in the nature of merger or in the nature of purchase. If the process takes place in the nature of merger then the all assets, liabilities, and shareholders holding not less than 90% of equity shares are automatically transferred to the new company or the holding company by virtue of the amalgamation. When amalgamation takes place in nature of purchase then the assets and liabilities of the company are taken over by the ruling company. All the properties and characteristics of amalgamating company should vest with the other company. Even the shareholders holding shares not less than 75% should transfer their shares to the transferee company. In such a case any company does not purchase the business resulting in a takeover, the transferor company does not completely lose its existence. Merger and acquisition has become the most prominent process in the corporate world. The key factor contributing to the explosion of this innovative form of restructuring is the massive number of advantages it offers to the business world.

Following are some of the known advantages of merger and acquisition:

The very first advantage of M&A is synergy that offers a surplus power that enables enhanced performance and cost efficiency. When two or more companies get together and are supported by each other, the resulting business is sure to gain tremendous profit in terms of financial gains and work performance.

Cost efficiency is another beneficial aspect of merger and acquisition. This is because any kind of merger actually improves the purchasing power as there is more negotiation with bulk orders. Apart from that staff reduction also helps a great deal in cutting cost and increasing profit margins of the company. Apart from this increase in volume of production results in reduced cost of production per unit that eventually leads to raised economies of scale.

With a merger it is easy to maintain the competitive edge because there are many issues and strategies that can e well understood and acquired by combining the resources and talents of two or more companies. A combination of two companies or two businesses certainly enhances and strengthens the business network by improving market reach. This offers new sales opportunities and new areas to explore the possibility of their business.

With all these benefits, a merger and acquisition deal increases the market power of the company which in turn limits the severity of the tough market competition. This enables the merged firm to take advantage of hi-tech technological advancement against obsolescence and price wars. Merger agreement is a contract that comprehensively lists down all details governing the merger of one or more companies. It is a main document that is legally binding on all the parties to the contract. To make it enforceable, the agreement has to be approved by and duly signed by the authorized parties. It can be cancelled under circumstances where any party fails to comply with the laid down terms and conditions.

The agreement should take into account all possibilities and lay down the plan of action for the same. The legal terminology should be correctly and carefully used. Moreover, any spelling mistake in the names can nullify the contract.

A number of formats are easily available for drafting a merger agreement. But due to the level of complexity and accountability involved, they are normally drafted by law firms for their clients. Some of the important components of the agreement are:

Agreement date - It is the date on which the agreement became enforceable. Names of the merging parties - Complete names of all the companies merging their business. Type of industry - It refers to the industry in which the merger is taking place. For instance, merger of two drug-making companies belong to the industry Biotechnology & Drugs.

Type of sector - In the above example, the sector is Healthcare. Jurisdiction - It is important to identify the laws governing the jurisdiction Other important details like members of the management, valuation of shares, liability of the members, valuation of tangible assets, etc.