#1
February 4th, 2016, 09:47 AM
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merger vs acquisition
Hi I would like to know the difference between mergers & acquisition as I am preparing a project on it as well as a few examples of the same in India?
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#2
February 4th, 2016, 09:48 AM
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Re: merger vs acquisition
Merger and Acquisition (M&A) are two terms that are mutually uttered, whenever one hears them. Are they both one? The answer is no, Merger literally means “to combine” while Acquisition literally means “to acquire”. In business vocabulary, Merger is a type of Amalgamation where 2 entities combine to form a new entity. But, if we talk about Acquisition, it is comparable to a takeover, in which one company is acquired by another company. BASIS FOR COMPARISON MERGER ACQUISITION Meaning The merger means the fusion of two or more than two companies voluntarily to form a new company. When one entity purchases the business of another entity, it is known as Acquisition. Formation of a new company Yes No Nature of Decision The mutual decision of the companies going through mergers. Friendly or hostile decision of acquiring and acquired companies. Minimum number of companies involved 3 2 Purpose To decrease competition and increase operational efficiency. For Instantaneous growth Size of Business Generally, the size of merging companies is more or less same. The size of the acquiring company will be more than the size of acquired company. Legal Formalities More legal formalities involved Less legal formalities Examples of Mergers and Acquisitions in India • Acquisition of Corus Group by Tata Steel in the year 2006. • Acquisition of Myntra by Flipkart in the year 2014. • Merger of Fortis Healthcare India and Fortis Healthcare International. • Acquisition of Ranbaxy Laboratories by Sun Pharmaceuticals. • Acquisition of Negma Laboratories by Workhardt |