Mergers & Acquisition in India
Mergers and Acquisitions: A Vital Role to Change Face of Indian Business Management
Rahul Mohare1, Aniruddha Akarte2, Ruchi Garge3
Mr. Rahul Mohare1
MBA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University rahul_3478@rediffmail.com Mr. Aniruddha Akarte2
MBA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University aniruddha_akarte@yahoo.com Ms. Ruchi Garge3
BCCA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University
Ruchi.garge@gmail.com
Introduction
The practice of mergers and acquisitions has attained considerable significance in the contemporary corporate scenario which is broadly used for reorganizing the business entities. Indian industries were exposed to plethora of challenges both nationally and internationally, since the introduction of Indian economic reform in 1991. The cut-throat competition in international market compelled the Indian firms to opt for mergers and acquisitions strategies, making it a vital premeditated option.
Mergers and Acquisitions refers to that aspect of corporate strategy, corporate finance and management dealing with buying selling and combating of different companies that can aid, finance or help a growing company in a given industry grow rapidly without having to create another business entity. All companies which are interested in merger and acquisitions, are having a specific objective behind this process like:- 1. Combined economy can often reduced its fixed cost by removing duplicate departments or operation, lowering the cost of revenue, thus increasing profit margins. 2. Increased market shares 3. Cross selling 4. A profitable company can buy a loss maker to use the targets loss as their as their advantage by reducing their tax liability.
Until upto a couple of years back, the news that Indian companies having acquired, American-European entities was very rare. However, this scenario has taken a sudden U turn.
Rahul Mohare1, Aniruddha Akarte2, Ruchi Garge3
Mr. Rahul Mohare1
MBA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University rahul_3478@rediffmail.com Mr. Aniruddha Akarte2
MBA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University aniruddha_akarte@yahoo.com Ms. Ruchi Garge3
BCCA Department
Datta Meghe Institute of Management Studies
RTM Nagpur University
Ruchi.garge@gmail.com
Introduction
The practice of mergers and acquisitions has attained considerable significance in the contemporary corporate scenario which is broadly used for reorganizing the business entities. Indian industries were exposed to plethora of challenges both nationally and internationally, since the introduction of Indian economic reform in 1991. The cut-throat competition in international market compelled the Indian firms to opt for mergers and acquisitions strategies, making it a vital premeditated option.
Mergers and Acquisitions refers to that aspect of corporate strategy, corporate finance and management dealing with buying selling and combating of different companies that can aid, finance or help a growing company in a given industry grow rapidly without having to create another business entity. All companies which are interested in merger and acquisitions, are having a specific objective behind this process like:- 1. Combined economy can often reduced its fixed cost by removing duplicate departments or operation, lowering the cost of revenue, thus increasing profit margins. 2. Increased market shares 3. Cross selling 4. A profitable company can buy a loss maker to use the targets loss as their as their advantage by reducing their tax liability.
Until upto a couple of years back, the news that Indian companies having acquired, American-European entities was very rare. However, this scenario has taken a sudden U turn.
References: [1] http://www.ibef.org/economy/indianinvestmentsabroad.aspx [2] International Monetary Fund Report 2010 [3] Grant Thornton, International Business Report 2010, Emerging Markets Leading the Way to recovery [4] United Nations Conference on Trade and Development, 2009 [5] Accenture Annual report for ‘High Performance through Mergers and Acquisitions: India’s New Dynamics’ [6] Dealtracker, Providing business Owners with M&A market insight, A annual report by Grant Thornton, India