MERGER, ACQUISITION

AND CONSOLIDATION

Presented By
GROUP 2
 MERGER
A merger is an agreement that unites two existing
companies into one new company.

Mergers and acquisitions are commonly done to

expand a company’s reach, expand into new
segments, or gain market

 Combined infrastructure, technology, intangible

assets, etc.

Eg. Vodafone-Idea merger

 Types of Mergers
• Conglomerate
A merger between firms that are involved in totally
unrelated business activities.Eg. A leading manufacturer
of athletic shoes, merges with a soft drink firm.

• Horizontal Merger
A merger occurring between companies in the same
industry. Eg. like Coca-Cola and the Pepsi
Types of Mergers
• Market Extension Mergers
A market extension merger takes place between two companies
that deal in the same products but in separate markets.Eg. Eagle
Bancshares Inc by the RBC Centura
• Product Extension Mergers
A product extension merger takes place between two business
organizations that deal in products that are related to each other
and operate in the same market.Eg. Mobilink Telecom Inc. by
Broadcom
• Vertical Merger
A merger between two companies producing different
goods or services for one specific finished product.Eg.
An automobile company joining with a parts supplier.
 ACQUISITION
• An acquisition is a situation whereby one company
purchases most or all of another company's shares in
order to take control.
• An acquisition occurs when a buying company
obtains more than 50% ownership in a target
company.
• Resons are economies of scale, greater market share,
increased synergy, cost reductions etc

• Eg. Flipkart’s acquisition of eBay India

 ACQUISITION
• Friendly acquisitions
Friendly acquisitions often work towards a mutual benefit for
both the acquiring and target companies.
Product B

• Unfriendly acquisitions
Unfriendly acquisitions, commonly referred to as hostile
takeovers, occur when the target company does not consent to
the acquisition. In this case, the acquiring company must
• Feature 3
gather a majority stake to force the acquisition • Feature 2
• Feature 1
 CONSOLIDATION
 Consolidation the unification of two or more
corporations by dissolution of existing ones and creation
of a single new corporation.

No original firm continue to exist as separate entity

Eg; Hero cycles and Honda