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ACQUISITION DEALS
A general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed. Example: Company A+ Company B= Company C. Example: Company A+ Company B= Company A.
Horizontal
Vertical
Conglomerate
Congeneric
Size Issues Diversification Cultural Difference Unproductive work practices No ground rules
No detailed investigating
Employees may be resistant to change
Continuous communication employees, stakeholders, customers, suppliers and government leaders. Transparency in managers operations Capacity to meet new culture higher management professionals must be ready to greet a new or modified culture. Talent management by the management
Automobile sector
Acquisition deal Gave tuff competition to M&M after signing the deal with ford
February, 2008 Banking sector Acquisition deal shareholders got one share of HDFC Bank for every 29 shares held by them. 9,510 crore
eBay-Skype;$2.6 billion
o eBay and Skype were unable to successfully integrate their technological systems, according to PC World.
Conclusion
From the above discussion, we concluded that the mergers and acquisitions have emerged as a positive tool for the growth of the Banking sector as well as for the companies also. Business firms now have to face increased competition not only from firms within the country but also from international business giants thanks to globalization, liberalization, technological changes, etc. Making the mergers work successfully is not that easy as here we are not only just putting the two organizations together but also integrating people of two organizations with different cultures, attitudes and mindsets. While making the merger deals, it is necessary not only to make analysis of the financial aspects of the acquiring firm but also the cultural and people issues of both the concerns for proper postacquisition integration