MERGER

Mergers and acquisitions (or combinations) refer to a situation where the ownership of two or more enterprises is joined together. A merger is said to occur when two or more companies combine to form a new company. In this, two or more companies may merge with an existing company or they may merge to form a new company.

REQURIEMENT OF SUCCESSFUL MERGERS

1. DUE DILLIGENCE 2. INTEGRATION 3. POST MERGER INTEGRATION ORG.

DUE DILLIGENCE

Due diligence is a process of thorough and objective examination that is undertaken before corporate entities enter into major transactions such as mergers and acquisitions, issuing new stock or other securities, project finance, securitization, etc.

Types of Diligence

 The approach to due diligence depends on the type of transaction and what is intended to be achieved. Due diligence may be of various types: Commercial due diligence Reputational due diligence Financial due diligence Legal due diligence

Conducting a Due Diligence

 Presentation/background information by the issuer. Sending the issuer a questionnaire. Organizing a due diligence team. Issuer to create a data room (virtual or physical). Review of documentation/ discussion with management. Bring down due diligence questionnaires/calls prior to closing of the transaction.

End use of Diligence

 Identification and mitigation Of risks in light of market practice and legal requirements. Changes in structure of the transaction. Price adjustment. Conditions precedent. Representations and warranties. Verification of disclosures. Retention of purchase price. Indemnity. Conditions subsequent to closing the transaction.

PROCESS OF DUE DILIGENCE

INTEGRATION

BY INTEGRATION WE MEAN THE SELF ANALYSIS A COMPANY CARRIES OUT BEFORE GOING FOR ANY MERGERS.

REASON FOR MERGERS

FUND RAISING GROWTH DIVERSIFICATION INCREASING MANAGERIAL SKILL OR TECHNOLOGY TEXT CONSIDERATIOBNS SYNERGY MERGERES AS A TOOL FOR DEFENSE AGAINST TAKEOVER

THREATS FOR MERGERS

REGULATIONS OF GOVT. COST CUTTING THROUGH LAYOFF POOR SYNERGY REALISATION INDUCES COMPLEXITY, DUPLICATION OF PEOPLE, PROCESS AND TECHNOLOGY

IMPACT OF MERGERS ON PEOPLE

IMPACT ON WORKERS AND EMPLOYEES
LAYOFF
IMPACT ON TOP LEVEL MANAGFEMENT CLASH OF EGOS VARIATION IN CULTURE SHARE HOLDERS ACQUIRING FIRM ACQUIRED FIRM

Post-Merger Integration

WAYS TO IMPLEMENT INTEGRATION

You must send senior-level leaders out to talk with employees encourage cross-organizational reflections at the end of partnering experiments establish one company measurement processes to minimize the natural tendency to compare one groups results to the others.

To carry off this approach, however, the integration must be: Driven by a crystal-clear vision of the new organization, including its intended mission (core purpose), strategy, and essential values Owned and executed by and with key stakeholders Fluidly coordinated and flexibly self-adjusting Continually providing communication laterally, as well as vertically, across the system and in sync with the needs of ongoing day-to-day operations Open, interactive, and responsive to feedback Cognizant of human needs for inclusion, order, selfcontrol, and choice

The Integrated Organization

MERGERS AND COMPETITION POLICY

SETUP-OCTOBER 1999 CHAIRMAN- SHRI S.V.S.RAGHAVAN PURPOSE- EXAMINING THE EXISTING MRTP ACT, 1969

THE COMPETITION ACT ,2002

UNDER THIS A COMPETITION COMMISSION OF INDIA HAS BEEN ESTABLISHED TO CONTROL ANTI-COMPETITIVE AGREEMENTS, ABUSE OF DOMINANT POSITION BY AN ENTERPRISE & FOR REGULATING CERTAIN COMBINATIONS.

ANTI COMPETITIVE AGREEMENTS

TYPES OF ANTI COMPETITIVE AGREEMENT
HORIZONTAL AGREEMENT VERTICAL AGREEMENT

AGREEMENTS COMES UNDER HORIZONTAL AGREEMENTS

AN AGREEMENTS THAT DETERMINES PURCHASE OR SALE PRICE. LIMITS OR CONTROLS PRODUCTION SUPPLY, MARKETS, TRECHNICAL DEVELOPMENT, INVESTMENT OR PROVISION OF SERVICES. SHARES THE MARKET OR SOURCES OF PRODUCTION OR PROVISION OF SERVICES BY ALLOCATION OF GEOGRAPHICAL AREAS OR TYPES OF GOODS & SERVICES OR NUMBER OR CUSTOMERS IN THE MARKET

AGREEMENT COMES UNDER VERTICAL AGREEMENT

TIE IN AGREEMENTS EXCLUSIVE SUPPLY OR DISTRIBUTION AGREEMENT

RAGHAVAN COMMITTEE

 THANK YOU