A presentation of my recent lecture at a Business School

1. Mergers and Acquisitions Strategy
Dr. Sandeep Kulshrestha

2. Philosophy behind mergers and acquisitions
 Part of the overall concept of “integration”
 A merger capitalizes on “mutual synergy” of the
Strengths of the merging entities
 Acquiring an existing company is better strategy
than scaling up on its own
 It is also an strategy to showcase an organisation
on a broader scale

3. Merger defined
 A merger is unification of two or more firms into
one entity, with an objective of better profitability
and high value to the stakeholders”
 In nutshell merger usually happens within
companies who are in the similar line of
business, with an objective to scale-up the
operations Example: IDBI bank merged with
United Western Bank

4. Acquisition defined
 Acquisition normally signifies acquiring/buying of
a smaller company by a large company in the
similar line of business.
 Acquisition can be either normal (by consent) or
forced (by acquiring large amount of shares in a
company) Example: United Breweries acquired
Shaw Wallace’s liquor business.

5. The need of mergers and acquisitions
 A well thought of corporate strategy to have
substantial market share
 Synergy of mutual expertise and
experience, which helps in scaling up the market
potential
 Better reach of products and services
 Acquiring another company or merging with
another company gives a better leverage
 Can lead to better Earning per share and
shareholders’ expectations

6. Strategic Parameters
 Synergy within corporations
 Capitalization of the Strengths of merging
companies/acquired company and nullification of
weaknesses
 The opportunity which the market may provide
post merger/acquisitions
 How the merger/acquisition will help the
company’s long term vision
 In short, what will be the value addition for a
company!

7. Strategic Exercises
 Financial modeling
 Governance issues
 Shareholding Patterns
 Human Resources Strategy
 Management of investments
 Fund allocation for new activities
 Re-framing of vision/mission
 Marketing strategy
 Fresh Branding exercises