Top Mergers and Acquisitions Firm In India
What are Mergers and Acquisitions?
Mergersand acquisitions advisory is a combination of two or more companies into one,
wherein the merging companies lose their identities. No fresh investment is
made during this procedure. However, an exchange of shares takes place between
the companies involved in such a process. Generally, the company that lasts is
the buyer which preserves its identity and the seller company is extinguished.
India
is the second-fastest emerging economy in the world. Investors, big companies,
and industrial houses view the Indian market in a rising and flourishing phase,
whereby returns on capital and shareholder returns are high.
MERGERS ARE IN TRUTH ACQUISITIONS
Under
mergers and acquisitions, one business buys another and incorporates it into
its business model. Because of the misuse of the term merger, most of the
information on mergers is presented for the joint mergers and acquisitions (M
& A Advisory) that are happening. This gives a wider and more precise
view of the merger market.
What are the major reasons behind Mergers and acquisitions?
The
basic reason for merger and acquisition services Provice by Nangia Andersen is that organizations combine
and form a single entity to attain economies of scale, widen their reach,
obtain strategic skills, and advance competitive advantage.
In simple terms, mergers are considered as a significant tool by companies to increase their operation and increase their profits. Indian markets have seen a growing trend in mergers which may be due to the business intelligence by large industrial houses, merging of business by MNC’s operating in India, growing competition against imports, and acquisition activities.
What are the different kinds of Mergers?
From
the perception of entities, there is a whole host of distinct mergers. However,
from an economist's point of view it is built on the relationship between the two
companies intending to merge.
Basically, mergers are classified into the following broad
categories:
- Horizontal
merger: When two companies are in
direct competition and share the same product lines and markets i.e. it results
in the consolidation of firms that are direct competitors.
- Vertical
merger: Where exists a customer
and business or a supplier and corporation i.e. merger of firms that have
a definite and potential buyer-seller relationship.
- Conglomerate
merger: Merger between companies
that do not have any common business areas or no common relationship of
any kind. Consolidated companies may sell related products or share
marketing and distribution channels or production processes. Such kind of
merger be classified into the following:
- Product-extension
merger: Conglomerate mergers are
those in which the companies sell different but related products in the
same market or sell non-competing products and use similar marketing
channels of the manufacturing process.
- Market-extension
merger – Conglomerate mergers
wherein companies sell the same products in different markets/ geographic
markets.
- Pure
Conglomerate merger- When
two companies merge having no obvious relationship of any kind.
It
can be resolved that Horizontal mergers eradicate sellers and hence reshape the
market structure i.e. they have a direct effect on seller concentration whereas
vertical and conglomerate mergers do not effectively market structures
directly. They do not have anticompetitive concerns.
What is the Legal Procedures for Merger, Amalgamations, and
Take-over?
The
Law related to mergers is codified in the Indian Companies Act, 1956 which
works about several regulatory policies.
The
general law relating to mergers, amalgamations, and reconstruction is described
in sections 391 to 396 of the Companies Act, 1956. It deals with the concession
and preparation with creditors and members of a company needed for a merger.
Section 391 gives
the Tribunal the power to accept a compromise or arrangement between a company
and its creditors/ members subject to certain given conditions.
Section 392 gives
power to the Tribunal to enforce and/ or oversee such compromises or
arrangements with creditors and members.
Section 393 provides
for the accessibility of the information required by the creditors and members
of the concerned company when agreeing to such an arrangement.
Section 394 makes
provisions for enabling reconstruction and amalgamation of companies, by making
a suitable application to the Tribunal.
Section 395 gives
power and duty to obtain the shares of shareholders dissenting from the scheme
or contract approved by the majority.
What are the Advantages of Mergers and Acquisitions Company?
The
hiring of a mergers and acquisitions company is that they offers a
productive platform for the entities to grow, though much of it relies on the
way the deal is implemented. It is a way to raise market penetration in a
specific area with the help of a recognized base. A few reasons for Mergers
& Amalgamations are:
- Retrieving
new markets
- Maintenance
of growth momentum
- Acquiring
international brands and visibility
- Buying
cutting-edge technology instead of importing it
- Global
competition
- Improving
operating margins
- Evolving
new product mixes
Merger and Acquisition Services
We
offer all aspects of Mergers and Acquisitions company advisory,
providing critical assistance in the following areas:
- Appraising
and evaluating companies
- Designing
and executing an acquisition strategy
- Introducing
probable buyers or sellers
- Providing
supervision for the timing of specific transactions
- Developing
and formulating offering memorandums
- Negotiation
of sale agreements or terms of a purchase
- Intermediating
the compromise of compensation agreements with management teams
- Negotiating
agreements with capital sources for deal funding
Comments
Post a Comment