Value Creation through Mergers and Acquisitions (2020-09-15)

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VALUE CREATION THROUGH
MERGERS AND ACQUISITIONS
- A Case Study
Name: GIRISH HARIBHAU KHAIRNAR
PGDM-Finance (2018-2020)
Roll Number: HPGD/OC18/1419
Email ID: gkhairnar@gmail.com
WELINGKAR INSTITUTE OF MANAGEMENT
DEVELOPMENT & RESEARCH
Year of Submission – SEP-2020

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ACKNOWLEDGEMENT
With immense pleasure I would like to present the projectreport on “Value Creation
through Mergers and Acquisitions - A Case Study”. The completionof my projectdepends
upon the co-operation, coordination and combined efforts of several recourses of
knowledge, inspiration and energy.
I would like to thank WeSchool for providing me the opportunity to present this
project.
My special thanks to Mr. Pradeep Khanna my manager & professional mentor for
his invaluable guidance, cooperation for taking out the time from his busy schedule to help
me complete this project.
Lastly, all my friends, family & colleagues deserve thanks for their cooperation and
sharing of valuable information that helped me in the preparation of this report.
Sd/-
GIRISH HARIBHAU KHAIRNAR

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CERTIFICATE FROM THE GUIDE
This is to certifythat the project report titled “VALUE CREATION THROUGH
MERGERS AND ACQUISITIONS - A CASE STUDY” is a bonafide work carried out
by GIRISH HARIBHAU KHAIRNAR (Roll Number: HPGD/OC18/1419) a candidate for
PGDM-Finance of the Welingkar Institute of Management under my guidance & direction.
Sd/-
PRADEEP KHANNA
Financial Controller - India
Varian Medical Systems International India Pvt Ltd
Unit No. 33, Kalpataru Square, Off Andheri Kurla Road,
Andheri East, Mumbai 400059, Maharashtra, India

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DECLARATION
I, undersigned, hereby declare that the project report titled “Value Creation
through Mergers and Acquisitions - A Case Study” is a bonafide work carried out by
me under the guidance & direction of Mr. Pradeep Khanna.
Sd/-
GIRISH HARIBHAU KHAIRNAR
Manager - Finance & Accounting
Varian Medical Systems International India Pvt Ltd
Tower IV, Level 2, Cybercity Magarpatta,
Hadapsar, Pune 411013, Maharashtra, India

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TABLE OF CONTENTS
ACKNOWLEDGEMENT 2
CERTIFICATE FROM THE GUIDE 3
DECLARATION 4
1) INTRODUCTION 8
2) OBJECTIVE 12
3) TYPES OF M&A 13
I. MERGERS --------------------------------------------------------------------------------------------------------13
II. ACQUISITIONS--------------------------------------------------------------------------------------------------13
III. CONSOLIDATIONS --------------------------------------------------------------------------------------------14
IV. TENDER OFFERS----------------------------------------------------------------------------------------------14
V. ACQUISITION OF ASSETS -------------------------------------------------------------------------------------14
VI. MANAGEMENT ACQUISITIONS -----------------------------------------------------------------------------15
4) THE STRUCTURE OF M&A 16
5) M&A PROCESS 18
I. PRELIMINARY ASSESSMENTORBUSINESS VALUATIONS -----------------------------------18
II. PHASEOF PROPOSAL-------------------------------------------------------------------------------------18
III. EXIT PLAN---------------------------------------------------------------------------------------------------19
IV. STRUCTURED MARKETING---------------------------------------------------------------------------19
V. ORIGINATION OF PURCHASEAGREEMENTORMERGERAGREEMENT---------------19
VI. STAGE OF INTEGRATION ------------------------------------------------------------------------------19
6) M&A - ACCOUNTING 20
I. THE POOLING OFINTERESTSMETHOD: -----------------------------------------------------------20
II. THE PURCHASEMETHOD:------------------------------------------------------------------------------20
7) VALUATION FOR M&A 23

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I. COMPARATIVE RATIOS:---------------------------------------------------------------------------------------23
II. REPLACEMENT COST: ----------------------------------------------------------------------------------------24
III. DISCOUNTED CASH FLOW (DCF): -------------------------------------------------------------------------24
8) THE DEAL OF M&A 28
9) M&A STRATEGIES 30
10) IMPACTS OF M&A 31
I. EMPLOYEES -----------------------------------------------------------------------------------------------------31
II. MANAGEMENT AT THE TOP:---------------------------------------------------------------------------------32
III. SHAREHOLDERS:---------------------------------------------------------------------------------------------32
11) VALUE CREATION THROUGH M&A 33
I. NETWORK ECONOMIES.----------------------------------------------------------------------------------33
II. RESEARCH AND DEVELOPMENT. --------------------------------------------------------------------33
III. OTHER ECONOMIES OF SCALE.----------------------------------------------------------------------33
IV. AVOID DUPLICATION.-----------------------------------------------------------------------------------34
V. REGULATION OFMONOPOLY-------------------------------------------------------------------------34
VI. GREATER EFFICIENCY. --------------------------------------------------------------------------------34
VII. PROTECT AN INDUSTRY FROM CLOSING. ------------------------------------------------------34
VIII. DIVERSIFICATION.-------------------------------------------------------------------------------------34
IX. INTERNATIONAL COMPETITION.-------------------------------------------------------------------35
X. GREATER INVESTMENT INR&D----------------------------------------------------------------------35
12) CRITICAL ANALYSIS OF M&A 36
I. HIGHER PRICES& MONOPOLY:-----------------------------------------------------------------------37
II. LESS CHOICE------------------------------------------------------------------------------------------------37
III. JOB LOSSES -------------------------------------------------------------------------------------------------37
IV. DIS-ECONOMIESOF SCALE ---------------------------------------------------------------------------38
13) CASE STUDIES 39
I. FEWOF THE TOPM&ADEALS IN INDIA & WORLD ---------------------------------------------40
II. M&AIN THE INDIAN BANKING SECTOR-----------------------------------------------------------45
III. VALUE CREATION IN THEBANKING SECTOR THROUGH M&A--------------------------46
14) PERSONAL EXPERIENCES 52
I. VARIAN SOFTWARE– VARIAN INTERNATIONAL------------------------------------------------52

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II. VARIAN – CTSI ACQUISITION--------------------------------------------------------------------------53
III. VARIAN – SIEMENSMERGER -------------------------------------------------------------------------54
15) SUGGESTIONS: 56
16) OVERALL CONCLUSION & RECOMMENDATIONS 59
17) BIBLIOGRAPHY 61

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1) INTRODUCTION
We have been learning about the companies coming together to form another
company and companies taking over the existing companies to expand their business. With
the recessiontaking toll of many businesses and the feeling of insecurity surging over our
businessmen in India as well as global markets, it is not surprising when we hear about the
immense numbers of corporate restructurings taking place. Several companies have been
taken over and several have undergone internal restructuring, whereas certain companies
in the same field of business have found it beneficial to merge into one company. In this
context, it would be essential for us to understand what corporate restructuring and mergers
and acquisitions are, all about & how the value is created through mergers and
acquisitions in the market.
The phrase mergers and acquisitions (normally abbreviated as “M&A”) refersto the
aspect of corporate strategy, corporate finance and management dealing with the buying,
selling and combining of different companies that can aid, finance, or help a growing
company in a given industry grow rapidly.
Mergers and acquisitions (M&A) can be defined as a consolidation of 2 or more
companies or assets through various types of financial transactions, including mergers,
acquisitions, consolidations, tender offers, purchase of assets, and management
acquisitions, etc.

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The terms "mergers" and "acquisitions" are often used interchangeably, although
they hold slightly different meanings.
ACQUISITION: -
When one company takes over another entity, and establishes itselfas the new
owner, the purchase is called an acquisition. From a legal point of view, the target
company ceases to exist, the buyer absorbs the business, and the buyer's stockcontinues to
be traded, while the target company’s stock ceases to trade.
MERGER:-
On the other hand, a merger describes two firms of approximately the same
size, who join forces to move forward as a single new entity, rather than remain
separately owned and operated. This action is known as a "merger of equals." Both
companies' stocks are surrendered, and new company stock is issued in its place.
A recent example can be given of Vodafone & Idea, both companies have
recentlycompletedthe mergerand a new company VI has taken place of both entities.
This merger can be seen to acquire the major market share in the Indian cellular
industry after the introduction Reliance JIO.

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Difference between merger and acquisition can be illustrated from below picture.
UNFRIENDLY ("HOSTILE TAKEOVER") DEALS (Hostile Acquisitions): -
Where target companies do not wish to be purchased, are always regarded as
acquisitions. A deal, can thus, be classified as a merger or an acquisition, based on whether
the acquisition is friendly or hostile and how it is announced. In other words, the difference
lies inhow the deal is communicated to the target company's board of directors, employees,
and shareholders.
 The term mergers and acquisitions (M&A) refer broadly to the process of one
company combining with one another.

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 In an acquisition, one company purchases the other outright. The acquired firm does
not change its legal name or structure but is now owned by the parent company.
 A merger is the combination of two firms, which subsequently form a new legal
entity under the banner of one corporate name.
 M&A deals generate sizable profits for the investment banking industry, but not all
mergers or acquisition deals close.
 Post-merger, some companies find great successand growth, while others might see
failure.

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2) OBJECTIVE
The objective of this report is to study the Mergers and Acquisitions in details, how
the value can be created through it.
I have taken the major mergers and acquisitions happened in the corporate sector.
Additionally, I have also done some case studies in the Indian banking sector.
Another objective is to study how Mergers and acquisitions benefit the various stake
holders like employees, management, shareholders of both acquired and acquiring
companies.
This study also highlights how mergers can be beneficial to consumers & the
benefits as well as dis-advantages of M&A.

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3) TYPES OF M&A
Here is a brief overview of some common transactions that fall under the
M&A umbrella:
I. Mergers
In a merger, the boards of directors fortwo companies approve the combination and
seek shareholders' approval. Post-merger, the acquired company ceases to exist and
becomes part of the acquiring company. For example, in 1998 a merger deal occurred
between Digital Computers and Compaq, whereby Compaq absorbed Digital Computers.
Compaq later merged with Hewlett-Packard in 2002. Compaq's pre-merger ticker symbol
was CPQ. This was combined with Hewlett-Packard's ticker symbol (HWP) to create the
current ticker symbol (HPQ).
II. Acquisitions
In a simple acquisition, the acquiring company obtains the majority stake in the
acquired firm, which does not change its name oralter its legal structure, and oftenpreserve
the existing stock symbol. An example of this transaction is Manulife Financial
Corporation's 2004 acquisition of John Hancock Financial Services, where both companies
preserved their names and organizational structures. Acquisitions may be done by
exchanging one company's stock for the others or using cash to purchase the target
company's shares.

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III. Consolidations
Consolidation creates a new company by combining core businesses and
abandoning the old corporate structures. Stockholders of both companies must approve the
consolidation, and subsequent to the approval, receive common equity shares in the new
firm. For example, in 1998, Citicorp and Traveler's Insurance Group announced a
consolidation, which resulted in Citigroup.
IV. Tender Offers
In a tender offer, one company offers to purchase the outstanding stock of the other
firm, at a specific price rather than market price. The acquiring company communicates
the offer directly to the other company's shareholders, bypassing the management and
board of directors.For example, in 2008, Johnson & Johnson made a tender offerto acquire
Omrix Biopharmaceuticals for $438 million. While the acquiring company may continue
to exist — especiallyif there are certaindissenting shareholders — most tender offersresult
in mergers.
V. Acquisition of Assets
In an acquisition of assets, one company directly acquires the assets of another
company. The company whose assets are being acquired must obtain approval from its
shareholders. The purchase of assets is typical during bankruptcy proceedings, where other
companies bid for various assets of the bankrupt company, which is liquidated upon the
final transfer of assets to the acquiring firms.

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VI. Management Acquisitions
In a management acquisition, also known as a management-led buyout (MBO), a
company's executives purchase a controlling stake in another company, taking it private.
These former executives often partner with a financier or former corporate officers, to help
fund a transaction. Such M&A transactions are typically financed disproportionately with
debt, and most of the shareholders must approve it. For example, in 2013, Dell Corporation
announced that it was acquired by its chief executive manager, Michael Dell.

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4) THE STRUCTUREOF M&A
Mergers may be structured in multiple different ways, based on the relationship
between the two companies involved in the deal.
 Horizontal merger: Two companies that are in direct competition and share the
same product lines and markets.
 Vertical merger: A customer and company or a supplier and company. Think of
a cone supplier merging with an ice cream maker.
 Congeneric mergers: Two businesses that serve the same consumer base in
different ways, such as a TV manufacturer and a cable company.

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 Market-extension merger: Two companies that sell the same products in
different markets.
 Product-extension merger: Two companies selling different but related
products in the same market.
 Conglomeration: Two companies that have no common business areas.
Mergers may also be distinguished by following two financing methods--each with its
own ramifications for investors.
Purchase Mergers: As the name suggests, this kind of merger occurs when one
company purchases another company. The purchase is made with cash or through
the issue of some kind of debt instrument. The sale is taxable, which attracts the
acquiring companies, who enjoy the tax benefits. Acquired assets can be written-up
to the actual purchase price, and the difference between the book value and the
purchase price of the assets can depreciate annually, reducing taxes payable by the
acquiring company.
Consolidation Mergers: With this merger, a brand-new company is formed, and
both companies are bought and combined under the new entity. The tax terms are
the same as those of a purchase merger.

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5) M&A PROCESS
The merger and Acquisition Process are a great concern for all the companies who
intend to go for a merger or an acquisition. This is so because the process of merger and
acquisition can heavily affect the benefits derived out of the merger or acquisition. So, the
Merger and Acquisition Process should be such that it would maximize the benefits of a
merger or acquisition deal.
The Merger and Acquisition Process can be divided into some steps. The stepwise
implementation of any merger process ensures its profitability.
I. PRELIMINARY ASSESSMENTOR BUSINESS VALUATIONS
In this first step of the Merger and Acquisition Process, the market value of the
target company is assessed. In this process of assessment, not only the current financial
performance of the company is examined but also the estimated future market value is
considered. The company which intends to acquire the target firm engages itself in a
thorough analysis of the target firm’s business history. The products of the firm, its’ capital
requirement, organizational structure, brand value everything is reviewed strictly.
II. PHASE OF PROPOSAL
after complete analysis and review of the target firm’s market performance, in the
second step, the proposal for merger or acquisition is given. Generally, this proposal is
given by issuing a non-binding offer document.

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III. EXIT PLAN
When a company decides to buy out the target firm and the target firm agrees, then
the latter involves in Exit Planning. The target firm plans the right time for an exit. It
considers all the alternatives like Full Sale, Partial Sale and others. The firm also does tax
planning and evaluates the options of reinvestment.
IV. STRUCTURED MARKETING
After finalizing the Exit Plan, the target firm involves the marketing process and
tries to achieve the highest selling price. In this step, the target firm concentrates on
structuring the business deal.
V. ORIGINATION OF PURCHASE AGREEMENT OR MERGER
AGREEMENT
In this step, the purchase agreement is made in case of an acquisition deal. In the
case of a Merger also, the final agreement papers are generated in this stage.
VI. STAGE OF INTEGRATION
In this final stage, the two firms are integrated through Merger or Acquisition. In
this stage, it is ensured that the new joint company carries the same rules and regulations
throughout the organization.

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6) M&A - ACCOUNTING
M&A is done either by the purchase or pooling of interests’ methods. There are
some differences between these two accounting methods which are discussed below. In
India it is also known as Accounting of Amalgamation.
Following are two important mergers and acquisition accounting method:
I. THE POOLING OF INTERESTSMETHOD:
The pooling of interests is a method of accounting that allows the balance sheets of
two companies to be added together during an acquisition or merger. The pooling of
interests is one of the accounting that companies can choose to employ when combining
assets.
II. THE PURCHASE METHOD:
The alternative would be the purchase method in which the purchasing company
adds the absorbed company's assets to its value. It is also known as Net Assets Method is
used when all the modes of discharging the purchase consideration (e.g. Pref. Shares,
Equity shares or cash payable to shareholders of transferor company) are not given and
hence where Net Payment Method cannot be adopted. Under this method, purchase
consideration is ascertained by aggregating the agreed values of only those assets which
have been taken over by the transferee company and deducting it from the agreed value of
liabilities taken over.

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‘Purchase Consideration’ under this method is taken as the aggregate of all
payments made in the form of shares, debentures, other securities, and cash to the
shareholders of the transferor company. This method is also known as the Net payment
method in the amalgamation.
COMPUTATION OF PURCHASE CONSIDERATION:
For computing purchase consideration, generally two methods are used:
Purchase Consideration using net asset method: Total of assets taken over and this
should be at fair values minus liabilities that are taken over at the agreed amounts. Agreed
value means the amount at which the transferor company has agreed to sell, and the
transferee company has agreed to take over a particular asset or liability.
Purchase consideration using payments method: Total of consideration paid to both
equity and preference shareholders in various forms.

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Example: A. Ltd takes over B. Ltd and for that, it agreed to pay Rs 5,00,000 in cash.
4,00,000 equity shares of Rs 10 each fully paid up at an agreed value of Rs 15 per share.
The purchase consideration will be calculated as follows:

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7) VALUATION FOR M&A
Both companies involved on either side of an M&A deal will value the target
company differently. The seller will obviously value the company at the highest price as
possible, while the buyer will attempt to buy it for the lowest possible price. Fortunately, a
company can be objectively valued by studying comparable companies in an industry, and
by relying on the following metrics:
I. Comparative Ratios:
The following are two examples of the many comparative metrics on which
acquiring companies may base their offers:
1.1 Price-Earnings Ratio (P/E Ratio): With the use of this ratio, an
acquiring company makes an offer that is a multiple of the earnings
of the target company. Examining the P/E for all the stocks within the
same industry group will give the acquiring company good guidance
for what the target's P/E multiple should be.
1.2 Enterprise-Value-to-Sales Ratio (EV/Sales): With this ratio, the
acquiring company makes an offer as a multiple of the revenues,
again, while being aware of the price-to-salesratio of other companies
in the industry.

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II. Replacement Cost:
In a few cases, acquisitions are based on the cost ofreplacing the target company.
For simplicity's sake, suppose the value of a company is simply the sum of all
its equipment and staffing costs. The acquiring company can literally order the
target to sell at that price, or it will create a competitor for the same cost.
Naturally, it takes a long time to assemble good management, acquire property,
and purchase the right equipment. This method of establishing a price certainly
wouldn't make much sense in a service industry where the key assets – people
and ideas – are hard to value and develop.
III. Discounted Cash Flow (DCF):
A key valuation tool in M&A, discounted cash flow analysis determines a
company's current value, according to itsestimated future cash flows. Forecasted
free cash flows (net income + depreciation/amortization - capital expenditures -
change in working capital) are discounted to a present value using the
company's weighted average costs of capital (WACC). Admittedly, DCF is
tricky to get right, but few tools can rival this valuation method.

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VALUATION RELATED TO MERGERS AND ACQUISITIONS
Valuation related to mergers and acquisitions employ several procedures, namely,
the income-based procedure, the asset-based procedure, and the market-based procedure.
There are many factors that determine whether a company ought to be bought or
not, such as the financial soundness of the subject company. Along with that, the financial
trends over the past couple of years and the trends manifested in the macroeconomic
indicators also need to be judged. Valuation related to mergers and acquisitions usually
follow these three methods: market-based method, asset-based method, and income-
based method. It may be felt that the market-based method is the most relevant, but all
three methods are significant depending upon the situation prevailing during the mergers
as well as acquisitions.
1. Market-based method:
Valuation related to mergers and acquisitions estimated by the market-based method
compares various aspects of the target company with the same aspects of the other
companies in the market. These companies (not the target company) usually possess
a market value, which has been established previously. Other aspects that need to be
compared include book value and earnings, or total revenue. Once all the data is
collected, an extensive comparison is made to find the value of the target/subject
company.
2. Asset-based method:
Valuation related to mergers and acquisitions employ this method when the subject or
the target company is a loss-making company. Under such circumstances, the assets
of the loss-making company are calculated. Along with this method, the market-based
method and the income-based method may also be employed. Valuations obtained
from this method may generate very small value; however, it is more likely to generate
the actual picture of the assets of the target company.

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3. Income-based method:
Valuation related to mergers and acquisitions employing the income-based method
take the net present value into consideration. The net present value of income, which
is likely to be in the future, is considered by the application ofa mathematical formula.
Synergy: The Premium for Potential Success, For the most part, acquiring
nearly always pay a substantial premium on the stock market value of the companies they
buy. The justification for doing so nearly always boils to the notion of synergy. The
merger benefits shareholders when a company’s post-merger share price increases by the
value of potential synergy.
It would be highly unlikely for rational owners to sell if they would benefit more by
not selling. That means buyers will need to pay a premium if they hope to acquire the
company, regardless of what pre-merger valuation tells them. For sellers, that premium
represents their company’s future prospects. For buyers, the premium represents part of
the merger synergy they expect can be achieved. The following equation offers a good way
to think about synergy and how to determine if a deal makes sense. The equation solves for
the minimum required synergy.
Pre-Merger Value of Both Firms + synergy = Pre – Merger Stock Price Post –
Merger Number of Shares
In other words, the success of a merger is measured by whether the value of the
buyer is enhanced by the action. However, the practical constraints of a merger often
prevent the expected benefits from being fully achieved
What to Look For

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It’s hard for investors to know when a deal is worthwhile. The burden of proof
should fall on the acquiring company. To find mergers that have a chance of success,
investors should start by looking for some of these criteria:
 A Reasonable Purchase Price: A premium of say, 10% above the market price
seems within the bounds of level-headedness. A premium of 50 %, on the other hand,
requires the synergy of stellar proportions for the deal to make sense. Investors should stay
away from companies that participate in such content.
 Cash transaction: Companies that pay in cash tend to be more careful when
calculating bids, and valuations come closer to target. When the stock is used as the
currency for acquisition, discipline can go by the wayside.
 Sensible Appetite: An acquiring company should be targeting a company that
is smaller or in business that the acquiring company knows intimately. Synergy is hard to
create from companies in disparate business areas.
Mergers are awfully hard to get right, so investors should look for acquiring companies
with a healthy grasp of reality. In other words, the success of a merger is measured by
whether the value of the buyer is enhanced by the action. However, the practical constraints
of merger soften prevent the expected benefits from being fully achieved.

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8) THE DEALOF M&A
The deal of merger or acquisition has been scripted below. Prior to the deal of
merger or acquisition is struck, there are many factors, which determine the success of the
entire process.
The commencement of the process of mergers and acquisitions is marked with a
“tender offer”. A tender offer is an offer wherein the purchase of all or some of the shares
belonging to the shareholders is intended. The price fixed for the same is of a premium rate
as compared to the market price. The laws formulated by the SEC or Securities And
Exchange Commission necessitates that if a company or an individual acquires 5% stock
in a company, the same should be conveyed to the SEC. A tender offer may either be a
“friendly” one or an “unfriendly” one. A company, which intends to acquire a company
eventually, buys out all the shares of the target company. However, the limit is restricted
to only 5% and the outstanding shares are reported as SEC. Declaration about the number
of shares (the ones, which have been bought and the outstanding ones) are made before the
SEC.
The total price of the acquiring company is ready to pay for the target company and
its assets are worked out with assistance from investment bankers as well as the financial
advisors. Thereafter the tender offeris published informing the shareholders about the offer
price as well as deadlines for either rejecting the offer or accepting it.
THE REACTION OF THE TARGET COMPANY
The target company responds to the above course of action in any one of the
following ways:
(I) agree with the Offer terms: In the event, it is felt by the top-level executives
and managers that the offer price may be accepted, the deal of merger or acquisition is
struck.

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(II) Try to negotiate: If the terms offered by the acquiring company are not
acceptable, then the shareholders of the target company will try to negotiate the deal of
merger or acquisition. The shareholders and the top-level management of the subject
company will try to work out issues so that they do not lose their jobs and simultaneously
see the interest of the target company.
(III) Looking for a White Knight: A White Knight is referredto another company,
which would like to go for a friendly takeover of the subject company, thereby saving the
target or the subject company from falling prey to that company, which is intending for a
hostile takeover of the target company.
(IV) Using a PoisonPill: The target company uses a Poisonpill wherein it attempts
to make its assets or shares less appealing to the company, which is attempting the tale
over. The target company may do it by two methods:
(a) By using a “flip in”: Permits the prevailing shareholders of the target
company to buy shares at a discounted rate.
(b) By using a “flip over”: Permits the shareholders to buy stakes of the
acquiring company at a discounted rate after the merger has taken place.
(V) Closure of the deal of merger or acquisition:
When the tender offer has been finally agreed upon by the target company and after
fulfilling certain regulatory criteria, the deal of merger or acquisition is executed wherein
some kind of transaction takes place. During the transaction, the company, which buys the
target company, makes payment with stock, cash or with both.

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9) M&A STRATEGIES
It is extremely important in order to derive the maximum benefit out of a merger or
acquisition deal. It is quite difficult to decide on the strategies of merger and acquisition,
especially for those companies who are going to make a merger or acquisition deal for the
first time. In this case, they take lessons from the past mergers and acquisitions that took
place in the market between other companies and proved to be successful.
Through market survey and market analysis of different mergers and acquisitions,
it has been found out that there are some golden rules which can be treated as the Strategies
for Successful Merger or Acquisition Deal.
Before entering into any merger or acquisition deal, the target company’s market
performance and market position is required to be examined thoroughly so that the optimal
target company can be chosen, and the deal can be finalized at a right price.
Identification of future market opportunities, recent market trends and customer’s
reaction to the company’s products are also very important in order to assess the growth
potential of the company. After finalizing the merger or acquisition deal, the integration
process of the companies should be started in time. Before the closing of the deal, when
the negotiation process is on, from that time, the management of both the companies
require to work on a proper integration strategy. This is to ensure that no potential problem
crop up after the closing of the deal.
If the company which intends to acquire the target firm plans restructuring of the
target company, then this plan should be declared and implemented within the period of
acquisition to avoid uncertainties.
It is also very important to consider the working environment and culture of the
workforce of the target company, at the time of drawing up Merger and Acquisition
Strategies, so that the labourers of the target company do not feel left out and become
demoralized.

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10) IMPACTS OF M&A
Just as mergers and acquisitions may be fruitful in some cases, the impact of
mergersand acquisitions onvarious sectsof the company may differ. In the article below,
details of how the shareholders, employees, and the management people are affected have
been briefed.
Mergers and acquisitions are aimed at improving the profits and productivity of a
company. Simultaneously, the objective is also to reduce the expenses of the firm.
However, mergers and acquisitions are not always successful. At times, the main goal for
which the process has taken place loses focus. The success of mergers, acquisitions or
takeovers is determined by a number of factors. Those mergers and acquisitions, which are
resisted not only affect the entire workforce in that organization but also harm the
credibility of the company. In the process, in addition to deviating from the actual aim,
psychological impacts are also many. Studies have suggested that mergers and acquisitions
affect the senior executives, the labor force and the shareholders.
I. Employees:
Impact of Mergers and Acquisitions on workers or employees:
The aftermath of mergers and acquisitions impact the employees or the workers the
most. It is a well-known fact that whenever there is a merger or an acquisition, there are
bound to be layoffs. In the event when a new resulting company is an efficient business
wise, it would require a smaller number of people to perform the same task. Under such
circumstances, the company would attempt to downsize the labour force. If the employees
who have been laid off possess enough skills, they may in fact benefit from the layoff and
move on for greener pastures. But it is usually seen that the employees who are laid off
would not have played a significant role under the new organizational setup. This accounts
for their removal from the new organization set up. These workers in turn would look for

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re-employment and may have to be satisfied with a much lesser pay package than the
previous one. Even though this may not lead to drastic unemployment levels, nevertheless,
the workers will have to compromise for the same. If not drastically, the mild undulations
created in the local economy cannot be ignored fully.
II. Managementat the top:
Impact of mergers and acquisitions on top level management:
Impact of mergers and acquisitions on top level management may actually involve
a “clash of the egos”. There might be variations in the cultures of the two organizations.
Under the new set up the manager may be asked to implement such policies or strategies,
which may not be quite approved by him. When such a situation arises, the main focus of
the organization gets diverted and executives become busy either settling matters among
themselves or moving on. If, however, the manager is well equipped with a degree or has
sufficient qualification, the migration to another company may not be troublesome at all.
III. Shareholders:
Shareholders of the acquired firm:
The shareholders of the acquired company benefit the most. The reason being, it is
seen in majority of the cases that the acquiring company usually pays a little excess than it
what should. Unless a man lives in a house he has recently bought, he will not be able to
know its drawbacks. So that the shareholders forgo their shares, the company has to offer
an amount more than the actual price, which is prevailing in the market. Buying a company
at a higher price can actually prove to be beneficial for the local economy.
Shareholders of the acquiring firm:
They are most affected. If we measure the benefits enjoyed by the shareholders of
the acquired company in degrees, the degree to which they were benefited, by the same
degree, these shareholders are harmed. This can be attributed to the debt load, which
accompanies an acquisition.

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11) VALUE CREATION THROUGHM&A
Are mergers in the public interest or are mergers just beneficial for top executives
and shareholders? When looking at mergers it is important to look at the subject on a case
by case basis as each merger has different possible benefits and costs. These are the most
likely advantages of a merger.
I. NETWORKECONOMIES.
In some industries, firms need to provide a national network. This means there are
very significant economies of scale. A national network may imply the most
efficient number of firms in the industry is one. For example, when T-Mobile
merged with Orange in the UK, they justified the merger on the grounds that:
“The ambition is to combine both the Orange and T-Mobile networks, cut out
duplication,andcreate a singlesuper-network.Forcustomers, it will mean a bigger
networkandbettercoveragewhile reducingthenumberof stationsandsites – which
is good for cost reduction as well as being good for the environment.”
II. RESEARCHAND DEVELOPMENT.
In some industries, it is important to invest in researchand development to discover
new products/technology. A merger enables the firm to be more profitable and have
greater funds for research and development. This is important in industries such as
drug research.
III. OTHER ECONOMIESOF SCALE.
The main advantage of mergers is all the potential economies of scale that can arise.
In a horizontal merger, this could be quite extensive, especially if there are high
fixed costs in the industry. Note: if the merger was a merger or conglomerate
merger, the scope for economies of scale would be lower.

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IV. AVOID DUPLICATION.
In some industries, it makes sense to have a merger to avoid duplication. For
example, two bus companies may be competing over the same stretch of roads.
Consumers could benefit from a single firm with lower costs. Avoiding duplication
would have environmental benefits and help reduce congestion.
V. REGULATION OF MONOPOLY.
Even if a firm gains monopoly power from a merger, it doesn’t have to lead to higher
prices if it is sufficiently regulated by the government. For example, in some
industries, the government has price controls to limit price increases. That enables
firms to benefit from economies of scale, but consumers don’t face monopoly
prices.
VI. GREATER EFFICIENCY.
Redundancies can be merited if they can be employed more efficiently.
VII. PROTECTAN INDUSTRYFROM CLOSING.
Mergers may be beneficial in a declining industry where firms are struggling to stay
afloat. For example, the UK government allowed a merger between Lloyds TSB and
HBOS when the banking industry was in crisis.
VIII. DIVERSIFICATION.
In a conglomerate merger, two firms in different industries merge. Here the benefit
could be sharing knowledge which might be applicable to the different industry. For
example, AOL and Time-Warner merger hoped to gain benefit from both new
internet industry and old media firm.

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IX. INTERNATIONALCOMPETITION.
Mergers can help firms deal with the threat of multinationals and compete on an
international scale.
X. GREATER INVESTMENT IN R&D
This is because the new firm will have more profit which can be used to finance
risky investment. This can lead to a better quality of goods for consumers. This is
important for industries such as pharmaceuticals which require a lot of investment.

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12) CRITICALANALYSISOF M&A
Pitfalls of mergers are the reasons for failures and the pitfalls of mergers are:
1. Poor Strategic Fit.
2. Cultural and Social Differences.
3. Incomplete and Inadequate due diligence.
4. Poorly Managed Integration.
5. Paying too much.
6. Limited focus.
7. Failure to get the figures audited.
8. Failure to make immediate control.
9. Failure to set the place for integration.
10. Incompatibility of partners.
11. Failures to adopt the product to local taste.
12. Irrelevant core competence.
When we look at the M&A’s there are many CONs also, since every merger has its
unique requirements and outputs, below can be listed: -

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I. HIGHER PRICES & MONOPOLY:-
A merger can reduce competitionand give the new firm monopoly power. With less
competition and greater market share, the new firm can usually increase prices for
consumers. For example, there is opposition to the merger between British Airways
(parent group IAG) and BMI. This merger would give British Airways an even
higher percentage of flights leaving Heathrow and therefore much scope for setting
higher prices. Richard Branson (of Virgin) states:
“This takeover would take British flying back to the dark ages. BA has a track record of
dominating routes, forcing less flying and higher prices. This move is clearly about
knocking out the competition. The regulators cannot allow British Airways to sew up UK
flying and squeeze the life out of the travelling public. It is vital that regulatory authorities,
in the UK as well as in Europe, give this merger the fullest possible scrutiny and ensure it
is stopped.
II. LESS CHOICE.
A merger can lead to less choice for consumers.
III. JOB LOSSES.
A merger can lead to job losses. This is a particular cause for concern if it is an
aggressive takeover by an ‘asset stripping’ company – A firm which seeks to merge
and get rid of under-performing sectors of the target firm.

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IV. DIS-ECONOMIES OF SCALE.
The new firm may experience dis-economies of scale from the increased size. After
a merger, the new bigger firm may lack the same degree of control and struggle to
motivate workers. If workers feel they are just part of a big multinational they may
be less motivated to try hard.

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13) CASE STUDIES
The practice of mergers and acquisitions has attained considerable
significance in the contemporary corporate scenario which is broadly used for
reorganizing the business entities. Indian industries were exposed to plethora of
challenges both nationally and internationally, since the introduction of Indian
economic reform in 1991. The cut-throat competition in international market
compelled the Indian firms to optfor mergers and acquisitions strategies, making it
a vital premeditated option.
Why Mergers and Acquisitions in India?
The factors responsible for making the merger and acquisition deals favorable in
India are:
 Dynamic government policies
 Corporate investments in industry
 Economic stability
 “READY TO EXPERIMENT” attitude of Indian industrialists
Sectors like pharmaceuticals, IT, ITES, telecommunications, steel,
construction, etc., have proved their worth in the international scenario and the rising
participation of Indian firms in signing M&A deals has further triggered the
acquisition activities in India.

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I. FEW OF THE TOP M&A DEALS IN INDIA & WORLD
1. VODAFONE-IDEA
The most recent and biggest merger in India is Vodafone and Idea merger.
Idea cellular which is owned by Kumar Mangalam Birla have come forward with
the proposition to merge with Vodafone India. This would result in the biggest
company considering the number of subscriber base catered by both the players.
The first step for AB group would be the acquisition of 4.9 percent of shares
from Vodafone. This would amount to a total of Rs. 3874 Crore wherein each share
is worth Rs. 108. This would be helpful in increasing the shareholding capacity of
Idea to 26 percent
While Vodafone holds 45.1 percent of the shares in the merger, Idea would
be allowed to buy another 9.6 percent but at a costofRs. 130 per share in the period
spread over next four years. However, if Idea is unable to come up equal to the
shareholding percentage of Vodafone, it can go forward and buy the number of
shares required further but at the price prevailing in the market
2. RELIANCE INDUSTRIES-FUTURE GROUP+

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Future Group lenders have been saved from a $2.2 billion hit ontheir exposure
to the conglomerate after the company announced its sale of all its businesses to
Reliance Industries (RIL) for ₹24,713 crore.
Post the deal Mukesh Ambani's Reliance Retail Ventures (RRVL) will hold
13.14% stake in Kishore Biyani's Future Enterprises Ltd and will take over debt of
₹12,500 crore.
3. RANBAXY-DAIICHI SANKYO:
Ranbaxy Laboratories Limited is an Indian multinational pharmaceutical
company that was incorporated in India in 1961 and Daiichi Sankyo is a global
pharmaceutical company, the second largest pharmaceutical company in Japan. In
2008, Daiichi Sankyo Co. Ltd., signed an agreement to acquire the entire
shareholders of the promoters of Ranbaxy Laboratories Ltd, the largest
pharmaceutical company in India.Ranbaxy’s sale to Japan’s Daiichi at the price
of $4.5 billion.
4. TATA MOTORS-JAGUAR LAND ROVER:
Tata Motors Limited (TELCO), is an Indian multinational automotive
manufacturing company headquartered in Mumbai, India and a subsidiary of the
Tata Group and the Jaguar Land Rover Automotive PLC is a British multinational

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automotive company headquarters in Whitley, Coventry, United Kingdom, and now
a subsidiary of Indian automaker Tata Motors.
Tata Motors acquisition of luxury car maker Jaguar Land Rover was for the price
of $2.3 billion.
5. MICROSOFT CORPORATION AND LINKEDIN
CORPORATION:
Microsoft Corporation and LinkedIn Corporation entered into a definitive
agreement. Microsoft acquired LinkedIn for 196 dollar per share in an all-cash
transaction valued at 26.2 billion US Dollar, inclusive of LinkedIn’s net cash.
6. MYNTRA - JABONG
Flipkart Ltd has acquired Jabong through its unit Myntra. Jabong offers more
than 1,500 international high-street brands, sports labels, Indian ethnic and designer
labels and over 150,000 styles from more than 1,000 sellers. Ananth Narayanan is
the current CEO of Myntra..
7. ASIAN PAINTS- ESS ESS BATHROOM PRODUCTS

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Asian paints signed a deal with Ess Ess Bathroom products PvtLtd to acquire its
front end sales business for an undisclosed sum in May, 2014. “The company on
May 14, 2014 has entered into a binding agreement with Ess Ess Bathroom Products
Pvt. Ltd and its promoters to acquire its entire front-end sales business including
brands, network and sales infrastructure,” Asian Paints said in a filing to the BSE on
Wednesday. Ess Ess produces high end products in bath and wash segment in India
and taking them over led to a 3.3% rise in share price for Asian paints.
8. RANBAXY- SUN PHARMACEUTICALS
Sun Pharmaceutical Industries Limited, a multinational pharmaceutical company
headquartered in Mumbai, Maharashtra which manufactures and sells
pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily
in India and the United States boughtthe Ranbaxy Laboratories. The deal is expected
to be completed in December, 2014.Ranbaxy shareholders will get 4 shares of Sun
Pharma for every 5 Ranbaxy shares held by them. The deal, worth $4 billion, will
lead to a 16.4 dilution in the equity capital of Sun Pharma.
9. VERIZON -YAHOO

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Verizon will acquire Yahoo’s core internet business for about $4.83 billion in all
cash deal. Yahoo will be merged with Verizon’s AOL unit under Marni Walden.
The deal is expected to benefit Verizon’s digital advertising business.

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II. M&A IN THE INDIAN BANKING SECTOR
The history of Indian banking can be divided into three main phases:
 Phase I (1786- 1969) - Initial phase of banking in India when many small banks
were set up
 Phase II (1969- 1991) - Nationalization, regularization and growth
 Phase III (1991 onwards) - Liberalization and its aftermath
With the reforms in Phase III the Indian banking sector, as it stands today, is
mature in supply, product range and reach, with banks having clean, strong and
transparent balance sheets. The major growth drivers are increase in retail credit
demand, proliferation of ATMs and debit-cards, decreasing NPAs due to
Securitisation, improved macroeconomic conditions, diversification, interest rate
spreads, and regulatory and policy changes (e.g. amendments to the Banking
Regulation Act).
Certain trends like growing competition, product innovation and branding,
focus on strengthening risk management systems, emphasis on technology have
emerged in the recent past.
In addition, the impact of the Basel II norms is going to be expensive for
Indian banks, with the need for additional capital requirement and costly database
creation and maintenance processes.Largerbanks would have a relative advantage
with the incorporation of the norms.

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III. VALUE CREATION IN THE BANKING
SECTOR THROUGH M&A
POST MERGERS & ACQUISITIONS
Merits of Bank Mergers and Acquisitions:
o Through mergers, it will help the banks to scale up its business and gain a large no.
of customers quickly.
o It also helps to fill the business gap, to empower the business to fill product or
technology gaps and being acquired by the big business firm it will help to upgrade
its technology platform efficiently.
o It will bring better efficiency ratio to the business and banking operations and
minimize the risk factor ratio by merging into one.
o It will also help in upgradation of technology, increase in profit and raise the
standard of living.
Demerits of Bank Mergers and Acquisitions:
o The foremost disadvantage is compliance and risk consistency and both the merged
organizations have different perspective of thinking, different risk culture so it
creates a negative impact on the profitability of the organization.

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o Another disadvantage is a poor culture fit as the bank only consider the perspective
of merging on papers do not consider their people or culture into account this is the
reason why many bank mergers ultimately fail.
Important Points relatedto Sections and Law:
o Amalgamation of two banking companies is under the provisions of Section 44 of
the Banking Regulation Act,1949.
o Amalgamation of a banking company with a non-banking company is governed by
sections 391 to 394 of the Companies Act, 1956
Below is the list of prominent mergers happened after the FY2010 in Indian
banking sectors, these mergers have resulted in many positive changes in the industries.
Indian government is keen on merging the public sector banks which results in better
efficiency as well reductionin the NPAs.
Year of Merged
Name of the Banks
Acquired
Name of the Banks Merged into
2019 August Indian Bank Indian Bank and Allahabad Bank
2019 August Union Bank Union Bank, Andhra Bank and Corporate Bank

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2019 August Canara Bank Canara Bank and Syndicate bank
2019 August Punjab National Bank
Punjab National Bank, Oriental bank of commerce
and United bank of India
2019 April Bank of Baroda Vijaya bank and Dena Bank
2018 December IDFC First Bank IDFC Bank and Capital First ltd.
2017 April State Bank of India Bhartiya Mahila Bank (BMB)
2017 April State Bank of India All the 5 associates of SBI
2014 Nov Kotak Mahindra Bank ING Vyasa Bank
2010 May ICICI Bank Bank of Rajasthan
After merger of banks in India now there will be only 12 public sector banks in India, listed
as below by asset. Bank of India, Bank of Baroda and Central Bank of India will continue to remain
independent.
1. SBI Bank (State Bank of India) –
The State Bank of India is the largest bank in India and one of the world’s biggest
corporations. SBI bank of India is one of the largest employers in the country and most trusted
brand and bank in India.

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SBI bank is also listed as one of the top 10 biggest companies of India by revenue in 2019
and possibly in 2020.
2. PNB (Punjab National Bank)
Punjab National Bank is one of the big four banks of India offers multinational banking and
financial services. PNB had the privilege to take over Nedungadi Bank, oldest private sector bank
as well as accounts of national Indian leaders.
Oriental Bank of Commerce and United Bank merger will merge into Punjab National Bank.
Punjab National Bank, Oriental Bank of Commerce and United Bank of India will combine to
become second-largest public bank in India.
3. Bank of Baroda
Bank of Baroda is a multinational Indian bank owned by Government of India and country’s
third largest lender. The bank merge with Vijaya Bank and Dena Bank and become third largest
bank in India after SBI bank and ICICI bank.
4. Canara Bank
Canara Bank is Government of India and listed as one of the oldest public sector banks in
India as well as one of the largest public sector Indian bank.
Canara Bank and Syndicate Bank will merge to become fourth largest PSB bank in India.
5. UBI (Union Bank of India)

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Union Bank of India will amalgamate with Andhra Bank and Corporation Bank–fifth largest
public sector bank of India. Union Bank of India is listed on the Forbes 2000 and one of the top
10 large government owned banks of India, having overseas branches in Hong Kong, Dubai.
Union Bank of India will amalgamate with Andhra Bank and Corporation Bank – fifth largest
public sector bank of India.
6. BOI (Bank of India)
Bank of India is one of the top 10 banks in India and a commercial bank with 56 offices
outside India. The Bank of India has 5100 branches and founder member of SWIFT.
7. Indian Bank
Indian Bank is the seventh largest bank in the country, after the merger of Kolkata-based
Allahabad Bank. The bank is owned the Government of India and a top performing bank in public
sector.
The merger of Allahabad Bank with Indian Bank will create the seventh largest public sector
bank with Rs 8.08 lakh crore business.
8. Central Bank Of India
Central Bank of India is another oldest and one of the largest commercial banks in India and
has a joint venture with Bank of India and Bank of Baroda.
9. IOB (Indian Overseas Bank)

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Indian Overseas Bank is based in Chennai and has an ISO certified information technology
department with international branches in Singapore, Colombo and Bangkok.
10. UCO Bank
UCO Bank is among the India’s most trusted brands, having offices spread all over India as
well as couple of overseas branches. This bank along with Bank of Maharashtra and Punjab and
Sind Bank will continue as separate entities.

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14) PERSONALEXPERIENCES
I. VARIAN SOFTWARE – VARIAN INTERNATIONAL
In my professional career I have worked on the amalgamation of Varian Medical Systems
(VMS) India legal entities.
Varian Medical Systems is a leader in manufacturing of cancer treatment machines as
well as related software in radio therapy. Varian had 2 separate legal entities (as wholly owned
subsidiaries of Varian Medical Systems, Inc.) as per below
Varian Medical Systems India Software Private Limited (hereinafter referred to as “Varian
Software” or “Transferor Company” or “Amalgamating Company”) was incorporated under the
Companies Act 1956, on 15th day of December 2006. The registered office of VMSISPL is
situated at Kalpataru Square, Unit No.33, 2nd Floor (Level 3), Off Andheri Kurla Road, Andheri
(East) Mumbai, Maharashtra 400 059, India. Varian Software is engaged in the business of
Software development, information technology and computer services.
Varian Medical Systems International (India) Private Limited (hereinafter referred to as
“Varian International” or “Amalgamated Company” or “Transferee Company”) was incorporated
under the Companies Act 1956, on the 8th September 2009. The registered office of Varian
International is situated at Kalpataru Square, Unit No.33, 2nd Floor (Level 3), Off Andheri Kurla
Road, Andheri (East) Mumbai, Maharashtra 400 059, India. Varian International is engaged in the

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business of manufacturing, preparing, marketing and distribution of medical, scientific and
industrial equipment’s
Management decided the merger of Varian Software with Varian International under a
Scheme of Amalgamation under section 230 to 232 of the Companies Act, 2013 in FY 2017-18.
This has resulted in better optimization of Varian’s resources, cutting down the compliance cost
as well as compliance requirement, getting rid of duplication of works and better people
management.
On merger of Varian Software into Varian International
1 fully paid up equity shares of Rs.10 each of Varian International, for every 1 fully paid up equity
share of face value of Rs. 100 held by such member in Varian Software.
After the restructuring following value creation & benefits are achieved for both the
companies and its stake holders:
 Operational rationalization, organizational efficiency and optimal utilization of
various resources;
 Simplification of the group structure;
 Consolidation of businesses;
 Maximize synergies;
 Reduction of administrative, operative and marketing costs; and
 Greater administrative efficiency.
II. VARIAN – CTSI ACQUISITION

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Varian Medical Systems, a radiation oncology treatment solutions provider, has
signed a definitive agreement to acquire Cancer Treatment Services International (CTSI)
for $283m. CTSI runs the American Oncology Institute in Hyderabad, India along with
many multidisciplinary cancer centres across the country.
CTSI has around 50 Cancer treatment facilities in India and this merger will result
in potential to provide new cutting-edge technology in those facilities. The combined
companies will have the potential to develop new multidisciplinary solutions using clinical
information benefiting oncologists. Furthermore, these offerings will enable expansion of
Varian’s solutions as well as boost the growth of its oncology systems business. Varian
expects the deal to boost identification of unmet clinical and operational needs in a bid to
enable technology and services advancements.
III. VARIAN – SIEMENS MERGER
Recently, in Aug 2020, Siemens Healthineers AG and Varian Medical Systems,
Inc. announced that they have entered into an agreement, pursuant to which Siemens
Healthineers shall acquire all shares of Varian for USD 177.50 per share in cash. This
corresponds to a purchase price of approximately USD 16.4 billion.
Varian’s Board of Directors unanimously approved the agreement and recommends
to the Varian shareholders also to approve the agreement. The acquisition of Varian is
expected to close in the first half of calendar year 2021, with closing being subject to
approval by Varian shareholders, receipt of regulatory approvals and satisfaction of other
customary closing conditions.
Varian and Siemens combination creates a global leader in healthcare with a
comprehensive portfolio to fight cancer.

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Varian shareholders to receive USD 177.50 per share in cash, representing a
purchase price of approximately USD 16.4 billion

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15) SUGGESTIONS:
This study brings out the following suggestions:
1) Investors in a company that is aiming to take over another company must determine
whether the purchase will beneficial or not. In this context, the dealmakers have to employees’
different methods and tools such as comparative ratios, replacement cost, discounted cost etc.
when assessing a target company.
2) To find merges that have a chance of success, investors should look at the criteria of
reasonable purchase price, cash transactions etc. Investors should for acquiring companies with
a healthy grasp of reality.
3) A proper audit of the financial affairs of the target company. Areas to look for are stocks,
sale ability of finished products, receivable and their collect ability, details and location of fixed
assets, unsecured loans, claims under litigation, loans from the promoters etc.
4) The chance of a successful takeover of an unrelated business can be considered to be very
bright if the answers to the following question are a clear yes.
a. Does the company have a top-class management team to run the new
acquisition?
b. Does the company have deep pockets to find unforeseen financial needs of the
company taken over?

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c. Does the company have adequate financial and information control system that
can be transplanted in the new company?
5) Risk of failure will be minimized if there is a detailed evaluation of the target company’s
business conditions carried out by professionals in that line of business. Detailed examination of
the manufacturing facilities, product design features, rejection rates, distribution system, profile of
key people and Productivity of work force should be done. One should not be carried away by
good head quarter building, guest house on a beach, plenty of land for expansion etc.
6) The first step after takeover is the integration of the new outfit with the acquiring company
in all respects. All functions such as marketing commercial, finance, production, design and
personnel should be put in place.
7) After the signing of the M & A agreement, the top management should not sit back and let
things happen. The first 100 days after the takeover determine the speed with which the process of
tackling the problems can be achieved. Top management follow up is essential to go with a clear
road map of actions to be taken and set pace for implementing once the control is assumed.
8) Alliances between two stronger companies are a safer bet than between two weal partners.
Frequently many strong companies seek smaller Partners in order to gain control while weal
companies look for stronger companies to bail them out. But experience shows that the weak link
becomes a drag and causes friction between parties.

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9) Adequate planning for the integration of the merger, establishing efficient and effective
reward system and incentive mechanisms and establishing the most significant techniques and
strategies for successful mergers and acquisitions. Therefore, these and other should be regarded
as substantially important in the realization of productive synergies through mergers and
acquisitions.

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16) OVERALL CONCLUSION & RECOMMENDATIONS
One size doesn’t fit all. Many companies find that the best route forward is expanding
ownership boundaries through mergers and acquisitions. For others, separating the public
ownership of a subsidiary or business segment offers more advantages.
At least in theory, mergers create synergies and economies of scale, expanding operations
and cutting costs. Investors can take comfort in the idea that a merger will deliver enhanced market
power.
By contrast, de-merged companies often enjoy improving operating performance thanks
to redesigned management incentives. Additional capital can fund growth organically or through
acquisition. Meanwhile, investors benefit from the improved information flow from the de-merged
companies.
M & A comes in all shapes and investors need to consider the complex issues involved in
M & A. The most beneficial form of equity structure involves a complete analysis of the costs and
benefits associated with the deals.
Still efforts for M & A will continue as a strategy for growth, for synergy, for widening
capabilities and expertise for accessing wider market etc. It is important to assess the cost benefits
involved and the optimum strategy required whether M & A is the nectar of corporate life or poison
pill for destruction.

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In nutshell we can say that if a M&A is done with thorough research and due diligence, it
can prove to be a win-win situation for all stake holders including employees, share-holders,
investors, bankers & most importantly customers or consumers.

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17) BIBLIOGRAPHY
1. www.google.com
2. www.investopedia.com
3. http://tejas.iimb.ac.in/articles/01.php
4. www.economictimes.com
5. https://en.wikipedia.org/wiki/Mergers_and_acquisitions
6. http://finance.mapsofworld.com/merger-acquisition/accounting.html
7. http://finance.yahoo.com/news/15-biggest-mergers-time-175152979.html
8. http://www.slideshare.net
9. https://www.jagranjosh.com/articles/idea-and-vodafone-merger-a-saga-of-becoming-
indias-largest-telecom-company-1490598696-1
10. https://www.jagranjosh.com/articles/top-10-mergers-and-acquisitions-of-201516-
1469679970-1
11. Scheme of merger for Varian Software and Varian International
12. https://www.siemens-healthineers.com/press-room/press-releases/august3.html
13. https://www.livemint.com/companies/news/reliance-industries-future-group-deal-saves-
lenders-from-2-2-billion-debt-hole-11598791874065.html
14. https://www.bankexamstoday.com/2017/12/mergers-and-acquisitions-in-banking.html

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15. http://www.walkthroughindia.com/offbeat/15-largest-public-and-private-sector-banks-in-
india/
16. https://affairscloud.com/list-mergers-acquisitions-bank-india/

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