FALL-2015

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Master of Business Administration - MBA Semester 3
MF0011-Mergers & Acquisitions-4 Credits
(Book ID: 1732)
Assignment (60 Marks)
Note: Answers for 10 marks questions should be approximately of 400
words. Each question is followed by evaluation scheme. Each Question
carries 10 marks 6 X 10=60.
Q1. Elaborate on the basic steps in organizing a merger and explain
on the five stage model of mergers and acquisitions.
Answer. Steps in a Merger
There are three major steps in a merger transaction: planning, resolution and
implementation.
Planning, which is the most complex part of the merger process, entails the
analysis, the action plan, and the negotiations between the parties involved.
The planning stage may last any length of time, but once it is complete, the
merger process is well on the way.
More in detail, the planning

Q2. Synergy is the additional value that is generated by the

combination of two or more than two firms creating opportunities.
Explain the role of industry life cycle and pre requisites for creation of
synergy.

Answer. Role of industry life Cycle

In the introduction stage of the life cycle, an industry is in its infancy. Perhaps a
new, unique product offering has been developed and patented, thus
beginning a new industry. Some analysts even add an embryonic stage before
introduction. At the introduction stage, the firm may be alone in the industry. It
may be a small entrepreneurial company or a proven company which used
research and development funds and expertise to develop something new.
Marketing refers to
Q3. Corporate restructuring is a broad based business initiative that
results in major change of size, ownership, control and/or
management. Write down the characteristics of corporate
restructuring and explain the types of corporate restructuring.
Answer. MEANING & NEED FOR CORPORATE RESTRUCTURING
Corporate restructuring is the process of redesigning one or more aspects of a
company. The process of reorganizing a company may be implemented due to
a number of different factors, such as positioning the company to be more
competitive, survive a currently adverse economic climate, or poise the
corporation to move in an entirely new direction. Here are some examples of
why corporate restructuring may take place and what it can mean for the
company. Restructuring a corporate entity is often a necessity when the
company has grown to the point that the original structure can no longer
efficiently

Q4. Leveraged Buyouts (LBO) is a financing technique of purchasing a

private company with the help of borrowed or debt capital. Explain
the modes of LBO financing and governance aspects of LBOs.
Answer. The acquisition of another company using a significant amount of
borrowed money (bonds or loans) to meet the cost of acquisition. Often, the
assets of the company being acquired are used as collateral for the loans in
addition to the assets of the acquiring company. The purpose of leveraged
buyouts is to allow companies to make large acquisitions without having to
commit a lot of capital.

Q5. Joint Ventures (JV) have become an important strategic option for
many businesses. Give the meaning of JV with example. Explain the
characteristics of Joint Ventures. Also explain the Rationale for Joint
Ventures and alternatives to JVs as expansion strategy options with
example.
Answer. Joint Venture

A joint venture (JV) is a business agreement in which the parties agree to

develop, for a finite time, a new entity and new assets by contributing equity.
They exercise control over the enterprise and consequently share revenues,
expenses and assets. There are other types of companies such as JV limited by
guarantee, joint ventures limited by guarantee with partners holding shares.

Q6. Amalgamation is the nature of merger is an

amalgamation/consolidation which satisfies/ meets the following
conditions. Explain the two methods of amalgamation. Explain the
treatment of Goodwill arising on Amalgamation and treatment of
reserves of amalgamation.
Answer. Methods of Amalgamation:
Pooling of interest Method:
Steps involved:
1. The assets, liabilities and reserves are recorded by the transferee company
at the current value.
2. The net profit/net loss of the transferor company is aggregated with that of
the transferee company or transferred to the General Reserve, if any.

FALL-2015
Get solved assignments at nominal price of
Rs.125 each.
Visit www.instamojo.com/subjects4u search for
your code pay and download fully solved
assignments.
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contact at
09882243490