Mergers and Acquisitions

NOTE ON MERGERS AND ACQUISITIONS

MERGER- Merger is an economic tool that is employed for elevating the long-standing success which is achieved by developing their functional competence. Mergers take place when the two firms mutually decide to combine their business. However, the process can take the form of an unfriendly subjugation.

ACQUISITIONS can be either friendly or intimidating and takes place between the bidding and the targeted firm. Reverse acquisition take place when the target company is bigger than the firm which offered the takeover proposal. During the process the bidder has the right to buy the share of the targeted firm.

DIFFERENCE BETWEEN MERGERS AND ACQUISITIONS

Though the two words mergers and acquisitions are often spoken in the same breath and are also used in such a way as if they are synonymous, however, there are certain differences between mergers and acquisitions

Merger Acquisition
The case when two companies (often of same size) decide to move forward as a single new company instead of operating business separately. The case when one company takes over another and establishes itself as the new owner of the business.
The stocks of both the companies are surrendered, while new stocks are issued afresh. The buyer company “swallows” the business of the target company, which ceases to exist.
For example, Glaxo Wellcome and SmithKline Beehcam ceased to exist and merged to become a new company, known as Glaxo SmithKline. Dr. Reddy’s Labs acquired Betapharm through an agreement amounting $597 million.

A buyout agreement can also be known as a merger when both owners mutually decide to combine their business in the best interest of their firms. But when the agreement is hostile, or when the target firm is unwilling to be bought, it is considered as an acquisition.

THE REAL PICTURE

It’s quite rare to find actual mergers in practice. In majority of the cases, when one company buys another, according to the terms of the deal, it allows acquired company to proclaim that it’s a merger, in spite of the fact that, it’s actually an acquisition. Being bought out may send negative impression about the company, and hence the acquired company prefers to call it merger.

A MERGER OR AN ACQUISITION?

So, the big question is when a purchase should be called a merger and when it should be described as an acquisition? It depends on how the two parties involved want to announce it like and how is it communicated to the board of directors, employees and shareholders of the company.
IMPORTANT TERMINOLOGY RELATED TO MERGERS AND ACQUISITIONS

  • Asset Stripping – Asset Stripping is the process in which a firm takes over another firm and sells its asset in fractions in order to come up with a cost that would match the total takeover expenditure.
  • Demerger or Spin off – Demerger refers to the practice of corporate reorganization. During this process a fraction of the firm may break up and establish itself as a new business identity.
  • Black Knight – The term generally refers to the firm which takes over the target firm in a hostile manner.
  • Carve – out – The procedure of trading a small part of the firm as an Initial Public Offering is known as carve-out.
  • Poison Pill or Suicide Pill Defense – Poison Pill is an approach which is adopted by the target firm to present itself as less likable for an unfriendly subjugation. The shareholders have full privilege to exchange their bonds at a premium if the buyout takes place.
  • Greenmail – Greenmail refers to the state of affairs where the target firm buys back its own assets or shares from the bidding firm at a greater cost.
  • Dawn Raid – The process of purchasing shares of the target firm anticipating the decline in market costs till the completion of the takeover is known as Dawn Raid.
  • Grey Knight – A firm that acquires another under ambiguous conditions or without any comprehensible intentions is known as a grey knight.
  • Macaroni Defense – Macaroni Defense is an approach that is implemented by the firms to protect them from any hostile subjugation. A company can prevent itself by issuing bonds that can be exchanged at a higher price.
  • Management Buy In – This term refers to the process where a firm buys and invests in another and employs their managers and officials to administer the new established business identity.
  • Hostile Takeover – Unfriendly or Hostile acquisitions takes place when the management of the target firm does not have any prior knowledge about it or does not mutually agree for the proposal. The disagreements between the chief executives of the target firm may not be long-lasting and the hostile subjugation may take up the form of friendly takeover. This practice is prevalent among the British and American firms. However, some of them are still against hostile subjugations.
  • Management Buy Out – A management buy out refers to the process in which the management buys a firm in collaboration with its undertaking entrepreneurs.

MERGER AND ACQUISITION PROCESS

It’s a strategic process for many organizations. Involves through analysis, some of the main steps involved are

Market valuation
Before going for any merger and acquisition, it is of utmost important that company must know the present market value of the organization as well as its estimated future financial performance. The information about organization, its history, products/services, facilities and ownerships are reviewed. Sales organization and marketing approaches are also taken into consideration

Exit Planning
The decision to sell business largely depends upon the future plan of the organization – what does it target to achieve and how is it going to handle the wealth etc. Various issues like estate planning, continuing business involvement, debt resolution etc. as well as tax issues and business issues are considered before making exit planning

Structured Marketing Process

This is merger and acquisition process involves marketing of the business entity. While doing the marketing, selling price is never divulged to the potential buyers. Serious buyers are also identified and then encouraged during the process. Following are the features of this phase.

  • Seller agrees on the disseminated materials in advance. Buyer also needs to sign a Non-Disclosure agreement.
  • Seller also presents Memorandum and Profiles, which factually showcases the business.
  • Database of prospective buyers are searched.
  • Assessment and screening of buyers are done.
  • Special focuses are given on he personal needs of the seller during structuring of deals.

Letter of Intent

Both, buyer and seller take the letter of intent to their respective attorneys to find out whether there is any scope of further negotiation left or not. Issues like price and terms, deciding on due diligence period, deal structure, purchase price adjustments, earn out provisions liability obligations, ISRA and ERISA issues, Non-solicitation agreement, Breakup fees and no shop provisions, pre closing tax liabilities, product liability issues, post closing insurance policies, representations and warranties, and indemnification issues etc. are negotiated in the Letter of Intent. After reviewing, a Definitive Purchase Agreement is prepared.

Buyer Due Diligence

This is the phase in the merger and acquisition process where seller makes its business process open for the buyer, so that it can make an in-depth investigation on the business as well as its attorneys, bankers, accountants,  advisors etc.

Definitive Purchase Agreement

Finally Definitive Purchase Agreement are made, which states the transaction details including regulatory approvals, financing sources and other conditions of sale.

Ten biggest Mergers and Acquisitions deals in India

  • Tata Steel acquired 100% stake in Corus Group on January 30, 2007. It was an all cash deal which cumulatively amounted to $12.2 billion.
  • Vodafone purchased administering interest of 67% owned by Hutch-Essar for a total worth of $11.1 billion on February 11, 2007.
  • India Aluminium and copper giant Hindalco Industries purchased Canada-based firm Novelis Inc in February 2007. The total worth of the deal was $6-billion.
  • Indian pharma industry registered its first biggest in 2008 M&A deal through the acquisition of Japanese pharmaceutical company Daiichi Sankyo by Indian major Ranbaxy for $4.5 billion.
  • The Oil and Natural Gas Corp purchased Imperial Energy Plc in January 2009. The deal amounted to $2.8 billion and was considered as one of the biggest takeovers after 96.8% of London based companies’ shareholders acknowledged the buyout proposal.
  • In November 2008 NTT DoCoMo, the Japan based telecom firm acquired 26% stake in Tata Teleservices for USD 2.7 billion.
  • India’s financial industry saw the merging of two prominent banks – HDFC Bank and Centurion Bank of Punjab. The deal took place in February 2008 for $2.4 billion.

students hope this information is useful, try to analyze the process for the above 10 deals.

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Placement Process


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Here is a list of questions for your interview preparations:

Please share the same with all your friends either through a classroom session or through Handouts or through any innovative method as you consider the best.

I. GD Topics

  1. Values ‘first’ or Money ‘first’.
  2. Is MBA necessary to obtain a Job?
  3. Is Education important or not in one’s life?
  4. Passion v/s Commitment.

II. HR Round Questions

  1. Tell me about your internship. What did you learn from it? What are your experiences?
  2. What do you think are your Strengths and Weaknesses?
  3. How flexible are you working in different positions and different locations?
  4. What are your career interests?
  5. How long do you plan to work? (to a lady candidate)
  6. May I know your family background.
  7. What do you want to work? What brings you to this interview?
  8. Brief your educational background.
  9. Tell us about yourself.
  10. What is the difference between organized and unorganized retailing?
  11. What post are you looking for in the organization/
  12. What are your capabilities that could be use to our Company?
  13. Why didn’t you join Indian army (his resume contained brief about his offer from Indian army before joining MBA).
  14. Tell me about the pricing strategy you designed in your Internship project.
  15. What performance did you develop in the project mentioned?
  16. On what topics have you given presentations?
  17. What do you know about retailing?
  18. What role do you play as a member of Rotaract Club? (for a candidate who had mentioned about her Rotaract Club membership in her CV)
  19. How comfortable in using MS Excel?
  20. What is the meaning of your Name?
  21. Anything that you would want to ask me?
  22. Which aspect of Marketing do you like and Why?
  23. What made you join ICFAI?
  24. What is famous about your Home Town?
  25. What is Working Capital?
  26. Five years down the line, where do you want to see yourself?
  27. What is double entry-system? What are its benefits?
  28. Why are you pursuing MBA?
  29. Can you reason out your poor academic performances in SSLC/ PUC/ Graduation?

III. Technical Round

a. (for a candidate aspiring for HR position)……….

  1. What do you know about PCMM?
  2. Tell me something about Hawthorne experiments.
  3. What is HRD?
  4. What is HRM?
  5. What is industrial relations?
  6. What is an industrial dispute

b. (for other candidates)……

  1. What is ratio analysis and how does it impact?
  2. What is the impact on cash flow statement?
  3. What is the difference between PBT and PBDT?
  4. What is Giffin Paradox?
  5. What are the cost centres of supply chain management?
  6. Explian BCG matrix.
  7. explain demand curve.
  8. Explain Veblin effect.
  9. Expalin pricing strategies.
  10. Explain different cost centres to a Company.
  11. What is diminishing marginal utility?
  12. How do you segment the market keeping target customers in mind?

I am sure the material prepared would reach the intended audience and serve the intended purpose.

Good Luck,

Here is a list of questions for your interview preparations:

Please share the same with all your friends either through a classroom session or through Handouts followed by Mock Interview or through any innovative method as you consider the best.

I. GD Topics

  1. Values ‘first’ or Money ‘first’.
  2. Is MBA necessary to obtain a Job?
  3. Is Education important or not in one’s life?
  4. Passion v/s Commitment.

II. HR Round Questions

  1. Tell me about your internship. What did you learn from it? What are your experiences?
  2. What do you think are your Strengths and Weaknesses?
  3. How flexible are you working in different positions and different locations?
  4. What are your career interests?
  5. How long do you plan to work? (to a lady candidate)
  6. May I know your family background.
  7. What do you want to work? What brings you to this interview?
  8. Brief your educational background.
  9. Tell us about yourself.
  10. What is the difference between organized and unorganized retailing?
  11. What post are you looking for in the organization/
  12. What are your capabilities that could be use to our Company?
  13. Why didn’t you join Indian army (his resume contained brief about his offer from Indian army before joining MBA).
  14. Tell me about the pricing strategy you designed in your Internship project.
  15. What performance did you develop in the project mentioned?
  16. On what topics have you given presentations?
  17. What do you know about retailing?
  18. What role do you play as a member of Rotaract Club? (for a candidate who had mentioned about her Rotaract Club membership in her CV)
  19. How comfortable in using MS Excel?
  20. What is the meaning of your Name?
  21. Anything that you would want to ask me?
  22. Which aspect of Marketing do you like and Why?
  23. What made you join ICFAI?
  24. What is famous about your Home Town?
  25. What is Working Capital?
  26. Five years down the line, where do you want to see yourself?
  27. What is double entry-system? What are its benefits?
  28. Why are you pursuing MBA?
  29. Can you reason out your poor academic performances in SSLC/ PUC/ Graduation?

III. Technical Round

a. (for a candidate aspiring for HR position)……….

  1. What do you know about PCMM?
  2. Tell me something about Hawthorne experiments.
  3. What is HRD?
  4. What is HRM?
  5. What is industrial relations?
  6. What is an industrial dispute

b. (for other candidates)……

  1. What is ratio analysis and how does it impact?
  2. What is the impact on cash flow statement?
  3. What is the difference between PBT and PBDT?
  4. What is Giffin Paradox?
  5. What are the cost centres of supply chain management?
  6. Explian BCG matrix.
  7. explain demand curve.
  8. Explain Veblin effect.
  9. Expalin pricing strategies.
  10. Explain different cost centres to a Company.
  11. What is diminishing marginal utility?
  12. How do you segment the market keeping target customers in mind?

I am sure the material prepared would reach the intended audience and serve the intended purpose.

Good Luck,

Here is a list of questions for your interview preparations:

Please share the same with all your friends either through a classroom session or through Handouts followed by Mock Interview or through any innovative method as you consider the best.

I. GD Topics

  1. Values ‘first’ or Money ‘first’.
  2. Is MBA necessary to obtain a Job?
  3. Is Education important or not in one’s life?
  4. Passion v/s Commitment.

II. HR Round Questions

  1. Tell me about your internship. What did you learn from it? What are your experiences?
  2. What do you think are your Strengths and Weaknesses?
  3. How flexible are you working in different positions and different locations?
  4. What are your career interests?
  5. How long do you plan to work? (to a lady candidate)
  6. May I know your family background.
  7. What do you want to work? What brings you to this interview?
  8. Brief your educational background.
  9. Tell us about yourself.
  10. What is the difference between organized and unorganized retailing?
  11. What post are you looking for in the organization/
  12. What are your capabilities that could be use to our Company?
  13. Why didn’t you join Indian army (his resume contained brief about his offer from Indian army before joining MBA).
  14. Tell me about the pricing strategy you designed in your Internship project.
  15. What performance did you develop in the project mentioned?
  16. On what topics have you given presentations?
  17. What do you know about retailing?
  18. What role do you play as a member of Rotaract Club? (for a candidate who had mentioned about her Rotaract Club membership in her CV)
  19. How comfortable in using MS Excel?
  20. What is the meaning of your Name?
  21. Anything that you would want to ask me?
  22. Which aspect of Marketing do you like and Why?
  23. What made you join ICFAI?
  24. What is famous about your Home Town?
  25. What is Working Capital?
  26. Five years down the line, where do you want to see yourself?
  27. What is double entry-system? What are its benefits?
  28. Why are you pursuing MBA?
  29. Can you reason out your poor academic performances in SSLC/ PUC/ Graduation?

III. Technical Round

a. (for a candidate aspiring for HR position)……….

  1. What do you know about PCMM?
  2. Tell me something about Hawthorne experiments.
  3. What is HRD?
  4. What is HRM?
  5. What is industrial relations?
  6. What is an industrial dispute

b. (for other candidates)……

  1. What is ratio analysis and how does it impact?
  2. What is the impact on cash flow statement?
  3. What is the difference between PBT and PBDT?
  4. What is Giffin Paradox?
  5. What are the cost centres of supply chain management?
  6. Explian BCG matrix.
  7. explain demand curve.
  8. Explain Veblin effect.
  9. Expalin pricing strategies.
  10. Explain different cost centres to a Company.
  11. What is diminishing marginal utility?
  12. How do you segment the market keeping target customers in mind?

I am sure the material prepared would reach the intended audience and serve the intended purpose.

Good Luck,

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CHOOSING MBA SPECIALIZATION

Choosing specialization is Cognitive process. Every student should thoroughly investigate the fitment of the self in various specializations available.

Give it the old three circles analysis: Good careers happen when you choose something you

(a) Have an aptitude for;

(b) Like to do; and

(c) Someone is willing to pay for.

Not knowing what you have an aptitude for and like to do, it would be difficult to arrive at the right decision.

Here are some points that may help you make the right choice.

  • Consider all available options and zero in on the one that matches with your career aspirations.
  • Make an assessment of your personality traits. If you are an extrovert who loves going places then marketing is the right choice. Again the creative ones can go for communications management, who love to train and can manage the work force should go for Human Resources development. Data loving guys have a great career in financial world and should go for Finance.
  • Your previous work experience can also be a factor in deciding your area of specialization.
  • List the job opportunities in your chosen field. Gather information regarding the job profile and salaries offered in each of these roles.
  • The specialization paper should be chosen on the basis of interest and not peer ever increasing salary
  • All said and done, follow the path you are passionate about and lead yourself to a fulfilling career ahead.

Finally Choosing the MBA course specialization should be on the basis of capability, choice and passion. First year is to find the area of interest lying inside the MBA aspirants. Choosing the specialization should be the candidate’s own decision and not of the friends, family or anyone.

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Choosing the Right Business School – Search Ends Here

Choosing a business school is a very important decision. Your choice will affect your career and your future. When choosing a business school, there are many things think about before applying. Every business school is a little bit different, and choosing which one is right for you can be an in-depth process that requires prospective students to consider a myriad of factors.

All of us dream of getting into finest-B Schools .The model of curriculum is different in different Business schools. Let’s review some points in choosing finest B schools

  1. Self analysis
  2. Course analysis
  3. Career statistics at the B-school
  4. Mentors/key resources of the School.

Regarding above all points, National school of Business molds students and nourishes with competent business needs.

Self Analysis

We thoroughly analyze your abilities and skills during the process of admission. We help the students with different techniques of self analysis and help them arrive at right analysis of self. We motivate and ensure every student to reach better platform in their career. At the end of the curriculum we create sense of achievement in every student. There are many interesting stories of students who topped career ladder which were out of their imagination. We give success wings by the end of the curriculum.

Course Analysis

We had researched the best of the sources and arrived with finest courses to shape the future business leaders. We offer Best MBA course affiliated to one of the best Universities in India. We developed unique curriculum to enhance this course to meet Business demands.

It establishes a common foundation in the fundamental practices of business including finance, marketing, leadership, negotiation, operations, strategy, and more. In addition to acquiring specific analytical and quantitative skills, students become acclimated to MBA Program standards of communication (Personality development courses, Soft skills) and collaboration, and develop strong, lasting relationships among themselves.In addition to above we help the students to arrive at right decision to choose their electives through different psychometric tests. We offer Electives best demanded by Business and suffix their employment. We also offer International Business as mandate to students to give them competent edge at employment.

We awake the joy and celebration of doing MBA program through our radically distinctive and postulated Course.

Career Statistics-

The placements are historic as there has been improvement in everything and every time. Right from pre-placement offers, lateral placements offers to final placement offers. Our top recruiters are from Banking, Information technologies, Health care, and Hospitality. Our college proved to be biggest source for best retail market. You will stand on the land of opportunities at NSB.

Mentoring& Key Resources

Key Resources

We think of the effective teachers we have had over the years with a sense of recognition, but those who have touched our humanity we remember with a deep sense of gratitude. This statement is true and truly tallies to our college resources (Faculty). Our Alumni team is always associated in every walk of NSB.  We ignite the passion of doing Business degree and give the success wings.

Mentoring

Mentoring is the process of inspiring, nurturing and guiding a mentee towards goal realization and superior performance. NSB Mentoring Program is designed to provide MBA students with an additional learning channel beyond the classroom and prepare them for going back to the business world. Further more, the program itself enhances everyone’s belonging to the NSB community. It is therefore an effective platform for mentors and mentees to interact and communicate freely.

Our quest of providing best programs in Management course is cause for the journey of innovation. Your benefits will not end there, because we believe learning never stops and we engage and exploit our students in knowledge.

Come celebrate the joy of doing MBA

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BU Project Viva Examination Postponed

BU Project Viva Examination Postponed to after BU Theory Examinations, but Projects submission on or before 10th Jan, 2011.

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Times of India – University Rankings

Times of India University Rankings

Bharathiar University has been ranked II best University in India….read more at

http://ms.timesofindia.com/ads/rankinguniversities/others.html

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Merry Christmas & Happy New Year

National School of Business Wish’s You

A Merry Christmas

&

Happy New Year

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National School of Business – Official Blog

Welcome to the Official National School of Business Blog.

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