Overview of Mergers and Acquisitions

&
MERGERS
ACQUISITIONS
Presented by Enterslice Fintech

MEANING OF MERGER
& ACQUISITION
There exists confusion between the meaning of merger and acquisition and a lot many
times, both are considered the same. However, there is a considerable difference between
these two terms.
Merger involves combining or coming together of two entities and formation of the two into
a single entity. Acquisition takes place when one entity buys another entity and the buyer
entity combines the other entity with itself. Both, merger and acquisition, represent organic
growth process.

ELIMINATE
TO
COMPETITION
A
CREATING
BRAND;
POWERFUL
Reasons for
Mergers and
Acquisitions
ESTABLISHING A
FOR
MARKET
BIGGER
OFF THE
SETTING
OF ONE
LOSSES
WITH THE
COMPANY
OF THE OTHER.
PROFIT
SHARE;

BENEFITS OF M&A
ADVANTAGES OF MERGERS AND ACQUISITIONS

INCREASE IN
SIZE
CONSTANTLY
INNOVATING AND
CREATING IDEAS
Via merger or acquisition, companies
can increase their size manifold, which
otherwise could have taken years.
These strategic tools are quicker way of
increasing the company size ad
operations.

REDUCED
COMPETITION
Mergers and acquisitions are a quick way for reducing the competition as they
allow for combining strengths with one’s own competitors. This way the
company taps the consumer base of the other. The mergers and acquisitions aim
at winning more consumers by synergizing their strengths and cutting the
competition.

INCREASED POWER
CUSTOMERS
ENGAGEMENT
two companies combine
When
power, they become
their
players in the market.
dominant
way they can dominate the
This
players as they now have
other
bigger market share.
a
more customers also
Attracting
easier.
becomes

TAX BENEFITS
Mergers and Acquisitions also have the tax benefits.
The losses of one company can be written off against
the profit of the other, thereby reducing the net
taxable income. Also, foreign entities with high
corporate tax can use its overseas merged/acquired
company’s domestic tax payment system in order to
pay lower amount of tax.

BETTER RESEARCH AND VISIBILITY
Since mergers and acquisitions make two market
players come together, their resources of research
and market visibility combine. This way they can
come up with better and more innovative ideas of
attracting consumers and increasing their market
share.

TYPES OF
MERGERS
HORIZONTAL MERGER
This occurs when two or more
companies which are in direct
competition and indulge in identical
products and markets bases, merge.
VERTICAL MERGER
This is the merger between a
company and its supplier or a
company and its customer.
CONGENERIC MERGER:
This is the merger between
companies that offer complimentary
products to the same consumer
base. This way the new company is
the expanded version of the merged
companies.

CONGLOMERATE
This is the merger of companies that have
completely different business fields and have no
common ground
MARKET-EXTENSION MERGER
This is the merger of the companies that sell
similar products in different markets.
PRODUCT-EXTENSION MERGER
This is the merger between companies that sell
related products in different markets.

APPLICABILITY OF
COMPANY LAW
WHAT'S IN STORE?

PROCEDURE FOR MERGERS AND ACQUISITIONS IN INDIA
EXAMINE THE MOA OF THE COMPANY
INFORM THE STOCK EXCHANGE
The very first step to M&A is to scrutinize the
Secondly, when you are going to enter mergers
Memorandum of Association (MOA) of the
and acquisitions, you must inform the stock
company properly to conduct a search and verify
exchange of the same. Further, you need to send
whether the power of merger is bestowed on or
copies of resolutions, orders, and notices to the
1 2
not.
stock exchange on a timely basis.
DRAFTING OF MERGER PROPOSAL
3 4
FILING APPLICATION TO THE HIGH COURT
The Board of the Director of both the involved
Once the Board of Directors have confirmed, the
companies needs to submit a confirmation on the
merger company needs to send an application to
draft of the merger proposal. Besides, it is also
the High Court of the concerned state where the
required to pass the resolution to authorize its
company has its headquarter.
key managerial personnel to carry on the matter.

CONCLUSION
Mergers and Acquisitions are strategic tools used by
companies for immediate tremendous growth. The companies
use the strengths of each other for getting a larger consumer
base and entering more markets. The legal aspects of getting
into a merger or acquisition are quite complicated. These
processes are usually undertaken by professionals who hold
years of expertise in the field.Our team of experts is wellversed
with the entire procedure of mergers and acquisitions.