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Presented by: PRESENTATION

ON RESON FOR FAILURE OF MERGER

&
ACQUISITION DEALS

Definition of 'Mergers And Acquisitions

A general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed. Example: Company A+ Company B= Company C. Example: Company A+ Company B= Company A.

Mergers and Acquisitions Types

Horizontal

Vertical
Conglomerate

Congeneric

Reasons for Mergers and Acquisitions


o

Capacity Economies of Scale

Accessing technology or skills


Tax reasons Gaining Cost Efficiency

Reasons for Failure of Mergers and Acquisitions


o o o o o o o

Size Issues Diversification Cultural Difference Unproductive work practices No ground rules

No detailed investigating
Employees may be resistant to change

How to Prevent Failure

Continuous communication employees, stakeholders, customers, suppliers and government leaders. Transparency in managers operations Capacity to meet new culture higher management professionals must be ready to greet a new or modified culture. Talent management by the management

SUCCESSFUL M&A DEALS

Tata Steel-Corus: $12.2 billion

January 30, 2007

Largest Indian take-over


After the deal TATAS

became the 5th largest


STEEL co.

100 % stake in CORUS paying Rs 428/- per share

Tata Motors-Jaguar Land Rover: $2.3 billion

March 2008 (just a year after acquiring Corus)

Automobile sector
Acquisition deal Gave tuff competition to M&M after signing the deal with ford

HDFC Bank-Centurion Bank of Punjab: $2.4 billion

February, 2008 Banking sector Acquisition deal shareholders got one share of HDFC Bank for every 29 shares held by them. 9,510 crore

Failure of m&a deal.

AT&T -T-Mobile for $39 billion


o on march 2011, AT&T announced that it would purchase T-MOBILE USA
o on august 2011,the antitrust division of US department of justice announce that it would seek to block the takeover

Apollo Tyres Ltd- Cooper Tire & Rubber Co ; $2.5 billion

o its a largest deal in indias automobile and tyre industry

eBay-Skype;$2.6 billion

o eBay and Skype were unable to successfully integrate their technological systems, according to PC World.

Conclusion

From the above discussion, we concluded that the mergers and acquisitions have emerged as a positive tool for the growth of the Banking sector as well as for the companies also. Business firms now have to face increased competition not only from firms within the country but also from international business giants thanks to globalization, liberalization, technological changes, etc. Making the mergers work successfully is not that easy as here we are not only just putting the two organizations together but also integrating people of two organizations with different cultures, attitudes and mindsets. While making the merger deals, it is necessary not only to make analysis of the financial aspects of the acquiring firm but also the cultural and people issues of both the concerns for proper postacquisition integration