Mergers and Acquisitions

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MERGERS ACQUISITIONS
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MEANING OF MERGER ACQUISITION
There exists confusion between the meaning of
merger and acquisition and a lot many times, both
are considered the same. However, there is a
considerable difference between these two
terms. Merger involves combining or coming
together of two entities and formation of the two
into a single entity. Acquisition takes place
when one entity buys another entity and the buyer
entity combines the other entity with itself.
Both, merger and acquisition, represent organic
growth process.
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FOR ESTABLISHING A BIGGER MARKET SHARE
TO ELIMINATE COMPETITION
Reasons for Mergers and Acquisitions
SETTING OFF THE LOSSES OF ONE COMPANY WITH THE
PROFIT OF THE OTHER.
CREATING A POWERFUL BRAND
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BENEFITS OF MA
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INCREASE IN SIZE
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REDUCED COMPETITION
Mergers and acquisitions are a quick way for
reducing the competition as they allow for
combining strengths with ones own competitors.
This way the company taps the consumer base of
the other. The mergers and acquisitions aim at
winning more consumers by synergizing their
strengths and cutting the competition.
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CUSTOMERS ENGAGEMENT
When two companies combine their power, they
become dominant players in the market. This way
they can dominate the other players as they now
have a bigger market share. Attracting more
customers also becomes easier.
INCREASED POWER
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TAX BENEFITS
Mergers and Acquisitions also have the tax
benefits. The losses of one company can be
written off against the profit of the other,
thereby reducing the net taxable income. Also,
foreign entities with high corporate tax can use
its overseas merged/acquired companys domestic
tax payment system in order to pay lower amount
of tax.
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BETTER RESEARCH AND VISIBILITY
Since mergers and acquisitions make two market
players come together, their resources of
research and market visibility combine. This way
they can come up with better and more innovative
ideas of attracting consumers and increasing
their market share.
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TYPES OF MERGERS
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CONGLOMERATE
This is the merger of companies that have
completely different business fields and have no
common ground
MARKET-EXTENSION MERGER
This is the merger of the companies that sell
similar products in different markets.
PRODUCT-EXTENSION MERGER
This is the merger between companies that sell
related products in different markets.
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PROCEDURE FOR MERGERS AND ACQUISITIONS IN INDIA
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PROCEDURE FOR MERGERS AND ACQUISITIONS IN INDIA
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