Group 1

Mergers

Definition of 'Merger'

The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. Basically, when two companies become one. This decision is usually mutual between both firms.

Different Types Of Mergers

Horizontal Merger

Conglomeration merger
Vertical Merger

Merger Deals

1. Tata Steel-Corus: $12.2 billion

January 30, 2007 Largest Indian take-over After the deal TATAS became the 5th largest STEEL co.

100 % stake in CORUS

paying Rs 428/- per

Image: B Mutharaman, Tata Steel MD; Ratan Tata, Tata chairman; J Leng, Corus chair; and P Varin, Corus CEO.

share

Disney and Pixar

Mickey and Nemo. Pinocchio and Toy Story. Cinderella and Cars. The merger of legendary Walt Disney and everything-we-create-kids-adore Pixar was a match made in cartoon heaven. Disney had released all of Pixars movies before, but with their contract about to run out after the release of Cars, the merger made perfect sense. With the merger, the two companies could collaborate freely and easily.

Hindustan Lever Limited acquiring TOMCO, (TATA Oil Mil Co)

The employees in TOMCO enjoyed better terms and services compared to the HLL employees. The HLL employees argued that if TOMCO employees are allowed to work on their original terms and conditions, two classes of employees will come in existence. Since both the set of employees now belong to same firm, a case of discrimination will arise against the employees of HLL. However the court supported TOMCO employees in the process.

Why Mergers Fail?

Cultural Flawed No No No

Difference

Intention

guiding principles ground rules detailed investigating stake holder outreach

Poor

Impact of mergers on employees

When one business acquires or is merged with another, the result is essentially a brand new organization. Managing that change is a complex and time-consuming process, with significant implications for all concerned. Employees of the two companies are affected in different ways, but there are a number of fundamental impacts to be considered.

 Reduced

job security and higher turnover

Changes
New

to terms and conditions

opportunities employee engagement

Competitiveness
Reduced

HR interventions
Cultural and people issues that have a major impact on success / failure of cross-border Merger deals:

Composition of new board Who will occupy which job? Undertaking a human capital audit and selecting the management team

Effective communication
Retaining talent creating the new culture Aligning performance evaluation and reward systems

Integration
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