Merger and Acquisition Merger and Acquisition

What is corporate restructuring? Internal Method By introducing new products and expending the capacity of existing products External Method By acquisition of existing of business firm in the form of merger, acquisition, amalgamation, takeovers, consolidation. Reason behind corporate restructuring. Importance of corporate restructuring

Reasons/Importance behind Restructuring - to survive in market - to increase market share - to use latest technology - to increase financial strength - to overcome from insolvency - to diversify their business - to make presence worldwide

Pillars of restructuring Merger Consolidation Holding Company Acquisition Strategy of restructuring Related Strategy Not Related Strategy

PORTER FIVE FORCE MODEL

Merger A combination of two or more company into a single company where one survive and other loose their corporate existence. Amalgamation one or more company may merge to form a new company. It contemplates a state of things under which two companies are so joined as to form a third entity. Consolidation it is mixing up of two companies to make them into a new one in which both the existing firm loose their identity and ease to exist. Acquisition An act of acquiring effective control by one company over assets or management of another company, without any combination of companies. Takeover it is nothing, just a control over management of companies by other. It in interchangeably used by acquisition.

Industry Life Cycle Introduction stage Exploitation stage Maturity stage Decline stage Value Creation in Mergers Marketing synergy Operating synergy Investment synergy Management synergy

Merger process Formulation of vision Growth Competition Pre-merger planning Post merger process Steps in strategic planning in Merger Assessment of environment change Evaluation of company capacity and limitation Assessment of expectation of stakeholders Formulation of vision, mission, goal Planning and policy Implementation Evaluation and control

Five Stage Model Corporate strategy development Organizing for acquisition Deal structuring Post acquisition integration Post acquisition audit and organizational learning Method of Financing Mergers Cash offer Share exchange ratio Hybrid A combination of cash and stock of purchasing entity or debt

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