MF0011 & MERGERS AND ACQUISITIONS

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ASSIGNMENT

DRIVE	FALL 2016
PROGRAM	MBA
SEMESTER	3
SUBJECT CODE & NAME	MF0011 & MERGERS AND ACQUISITIONS
BK ID	B1732
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Question.1. Explain the types of mergers and acquisitions (M&A).

Answer:A merger takes place when two companies combine together as equals to form an entirely new company. Mergers are rare, since most often companies are acquired by other companies, and it is more of absorption of operation of the target company. The term merger is more often used to show deference to employees and former owners when another company is taken over. Mergers and acquisition are a means to a long-term business strategy. New alliances, mergers or takeovers are usually based on company vision and mission

Question.2. Explain basic steps in organizing a merger. Explain financial aspects of mergers

Answer:The evaluation and negotiation of a merger are a major business decision. Your attorney, auditor, and banker are important sources of expertise and assistance. Other outside resources include business consultants, regional cooperatives, and university experts. The purpose of a merger is of an economic/industrial nature. The merger of two or more organizations allows for the generation of cost synergies (administration,

Question.3. Explain about Operating synergy and the role of Industry Lifecycle

Answer:Operating synergies can arise from the following:

·       Economies of scale;

·       Greater pricing power and higher margins resulting from greater market share and lower competition;

·       Combination of different functional strengths such as marketing skills and good product line; or

·       Higher levels of growth from new and expanded markets.

Operating synergies are achieved through horizontal, vertical or

Question.4. Write Short notes on:

A. Internalisation decision

Answer:Internalization can refer to any process that is handled within a particular entity instead of directing it to an outside source for completion. In business, internalization is a transaction conducted within the confines of a corporation rather than in the open market. Internalization can apply to a multinational corporation shifting assets between subsidiaries across borders.

B. Recommendation for effective Cross-border Acquisition

Answer:Successful cross-border mergers and acquisitions don’t need to be scary, but they do need to be planned properly. Expanding into a foreign market means:

·       Finding the right target

·       Executing the right transaction

·       And integrating your businesses the right way.

I’ve seen my fair share of these kinds of opportunities,

C. Role of government policies in international M&A (4 Marks)

Answer:Apart from this, the domestic industry might not have the capabilities to succeed in a particular sector nor the expertise to develop that sector. Therefore, FDI becomes necessary for the growth of that sector. Moreover, opening up of the economy is needed for admission into the WTO or the World Trade Organization, which means that in

Question.5. Explain the types of takeovers. Explain defenses against takeover bids.

Answer:When an acquiring company makes a bid for a target company. If the takeover goes through, the acquiring company becomes responsible for all of the target company’s operations, holdings and debt. When the target is a publicly

Question.6. Explain the factors in Post-merger integration and Five rules of Integration Process.

Answer:There are many factors which require attention of the management and tend to widen its role in post-merger integration. A list of such factors is give below in brief:

Legal obligation: Fulfilment of legal obligation becomes essential in post-merger integration. Such obligations depend upon the size of the company, debt structure and controlling regulations, distribution channels, and dealer net-work, suppliers’ relations etc. In all or some of these cases legal documentation would be involved. The rights and the interests of the stake holders should be protected with the new or changed

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