A Quick Peek into Merger & Acquisition

Merger and Acquisition

Merger and acquisition largely refer to the act of consolidating companies or assets to combine forces. It also diversifies products and helps business owners gain a competitive edge.

As per latest report, the M&A deal flow crossed the $82 billion mark in 2020. This is a 22.9% increase from that of 2019, showing brilliant prosperity despite the market uncertainties of 2020. Such statistical details prove why there is a rising demand for a merger and acquisition company in India like Tecnova, among foreign investors.

Merger and Acquisition: A brief overview

Differences

The terms Merger and Acquisition have widely different meanings, yet they are often used as synonyms.

  • Merger: When two companies join forces to form a new organization under one corporate name is a merger.
  • Acquisition: When a company completely takes over an existing firm’s shares, it is an acquisition.

Types

Merger and acquisition are of four types:

  • Horizontal- When two companies offering the same products and services come together, it is a horizontal M&A.
  • Vertical- Vertical M&A refers to the act when two companies with different product and services join their forces.
  • Conglomerate- The merger between two companies from entirely different industries offering distinct products or services merge, it becomes a conglomerate.
  • Concentric- The joining of two companies with the same customer base but different offerings is known as concentric M&A.



Stages

There are primarily 4 stages of merger and acquisition:

  • Deal Preparation
  • Negotiations
  • Agreement
  • Integration Process

Inbound and Outbound M&A

Inbound M&A – A cross-border merger in which the resulting joint firm is an Indian company.

Outbound M&A –  A cross-border merger where the resultant company is a foreign organization.

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Author’s Bio

Tecnova is a leading merger and acquisition company in India that offers end-to-end assistance in the execution of cross-border deals. It is an exclusive Indian member of the leading international network of Banking Boutiques and Corporate Finance Advisory firms called “Pandion Partners”.



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