Mergers and Acquisitions have become the order of the day and seems to be the mantra for the growth of industries and businesses. M&As are today an integral part of the business strategy of the times. Such well thought out M& As go a long way in fueling the growth of the business verticals and help face the challenge of growing competition. M&A is an approved, legitimate route which helps develop the business activities into global levels and change the orientation of the company towards sustained growth. The trick here is to really be on the prowl and assess the targeted prey from all angles. M&A should add organs and growth and should not in any way limit the growth potential. Backward integration and forward integration of products Selection of possible acquisitions, assessing compliance regulations, conducting due diligence, financial negotiations etc. As the deal progresses, the focus shifts to the actual people involved and the processes. Clear-cut strategies, irrefutable rationale behind the acquisitions and scrupulous adherence to the processes and procedures related to the M&A.
There are many critical issues involved in M&As. The imperative need is to define the objectives for the M&As. Acquisitions may be in the nature of assets/business take over, acquiring controlling stake or strategic alliance. Not all acquisitions lead eventually to mergers.There will be and there can be no physical transfer of assets to the acquirer. Merger generally indicates the amalgamation of two companies or other entities which involves the extinction of equity capital of one of the companies. Mergers may be of a company and its’ subsidiary or two or more companies with or without cross share holdings. The merger decision will be based on the passing of necessary resolutions in boards/general body meetings of companies and also the sanction of the court orders.