india going global.indd - The IIPM Think Tank

MERGERS & ACQUISITIONS
As much as we wish and
hope the marriage to be
a merger activity, it has
more characteristics of an
acquisition than a merger
Mergers and Acquisitions are rich affairs, just
like our own Indian weddings. However, the
similarity between the Indian weddings and
mergers is not just limited to lavishness and frequently
cited extravagance. Weddings in India can be directly
compared to the corporate mergers in many other aspects
as well. The emphasis here is on marriages in India because
in the western world the procedure is not as tedious
as it is in our country. To substantiate further, in both
the above cases, be it an Indian wedding or any other
marriage around the globe (including the cross-country/
cross-cultural/cross-continental mergers) there are a lot
who’s who of the family and relatives (Like the study of
financial statements, Cost-benefit analyses for an M &
A, and the valuation of the target firm) begin. Needless
to mention, the whole cumbersome activity of matching
horoscopes carried out by the Pundits (Consulting
firms) is also an indispensable ritual. Once the marriage
proposal is accepted by the head of the family (Management
acting on behalf of shareholders) and is declared,
a whole lot of activities are undertaken to welcome the
new member into the family (Say, profitability analyses
in terms of sharing of technology, downsizing of labor
and management, etc). Such is the fervor that even the
In order to find the suitable match, parents (Investment
bankers/advisors) use their personal contacts or social
networking means and sometimes even carry out classified ads
of stake holders involved before and after the marriage.
That is, why the process is tedious and why does it take
months of negotiations, speculations and evaluations
before the event actually occurs. Of course, there are
many significant differences between the two. However,
it would not be incorrect to classify an arranged marriage
as a special case of an M&A transaction.
When a marriage takes place in an Indian household,
there is so much of hype surrounding the marriage (and
if it is a celebrity wedding, then media goes gaga just as it
does when it gets a whiff of a potentially large-scale M &
A activity). Months (and at times, even years) before the
‘D’ day, preparations begin. Much before the marriage
is announced, background checking and consulting the
house gets a makeover.
In order to understand this peculiar resemblance further,
let’s take a detailed look at a traditional Indian “arranged
marriage” vis-à-vis a corporate merger:
Parties in question:
As much as we wish and hope the marriage to be a merger
activity, it has more characteristics of an acquisition than
a merger. Blame it all on the social setup that exists in
India. The acquirer and the target, here are the bride
and the groom respectively or vice versa. The roles that
the two play depends on the social system (in matriarchal
system, bride is the acquirer; while in patriarchal
system, bridegroom is the acquirer). Supposing it to be
July-October - 2007 Need the Dough
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