Mergers
& Acquisitions (M&As) play a vital role as a
growth factor in a business life cycle. In this article,
the authors explain the M&A corporate successes
(like Cisco, GE and Reliance), and the failures as well. Joint
Ventures and M&As are an integral part of human
life. Love them or hate them, you cannot just ignore
them. Be it oil, pharma, telecom, education or the food
sector, or be it Reliance (RIL and RPL), Tata's (Tatas
and CMC), Pfizer (Pfizer and Pharmacia), AOLWarner (AOL
and Time Warner), joint ventures and M&As have brought
new life to the style of doing business in today's world.
You name the industry, and there is a colossal inorganic
growth creeping in slowly.
Mergers,
acquisitions, takeovers and joint ventures are members
of the amalgamation family. One route that companies
often choose to expand is to merge with another company,
to takeover another company, or form a new company altogether
(JV). A merger is where two companies come together
as one companymaybe with a new name of the parent company
(either or both), losing their independent identities.
A takeover means that one company buys out the other
company. And joint venture is when a new company is
born with the parent companies in existence. Amalgamation
is the merger of two or more companies with another
existing company, or the merger of two or more companies
to form a new company. In India, amalgamation as per
the Company Law is either by order of the court (done
in public interest and in a view to re-establishment
or rehabilitation of the companies), or by order of
the central government (done in public interest and
under the scheme of amalgamation should be approved
by the "specified authority" under Sec. 72
A of the IT Act.). The company with which the amalgamating
company merges is called an amalgamated company. |
