Neuro Pasta Case Analysis

Mergers and
Acquisitions

Nero’s Pasta, Inc.
Case Study

Section2, Group 2
FT152003 Rajat Sharma
FT152007 Nupur Agrawal
FT152026 Renju Koshy
FT152050 Krunal Kapadia
FT152070 Manjit Singh
FT152079 Vatsal Goel
FT152090 Karthikeyan M

Section2, Group 2 1
Nero’s Pasta, Inc. Case Study
STATEMENT OF ACADEMIC INTEGRITY

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Section: C2
Group number: 2
Group Members:
FT152003
FT152007
FT152026
FT152050
FT152070
FT152079
FT152090

Rajat Sharma
Nupur Agrawal
Renju Koshy
Krunal Kapadia
Manjit Singh
Vatsal Goel
Karthikeyan M

Great Lakes Institute of Management

Section2, Group 2 2
Nero’s Pasta, Inc. Case Study

Rationale for mergers:
 Tax Consideration – Merger can be used to lower the taxes in certain circumstances. That is when two firms – one profitable and one unprofitable merge together such that the loss of the one firm is offset by the other firm. Also, in certain situation Merger also helpful in increasing the debt capacity.
 Diversification – Diversification will create value by reduction in unsystematic risk. The firms will diversify in order to move in to different businesses than what they are currently into.
 Control – Merger will lead to more control to the acquiring managements as they will be handling the bigger management than before. However , the acquired firm’s manager may be asked to leave the firm.
 Purchase of assets below replacement cost – Merger can also happen in order to replace the ageing assets or they want to acquire more assets which are currently operating with full capacity.  Synergy – This is the reason because of