Lastly, post-closing stage consists of integration of the two companies while adhering to non-compete or non-solicitation agreements. Because of the merger process complexity and shift in focus to other market areas, other business sectors don’t get enough attention. When new company management has to maintain control over unrelated businesses, it slows down the decision-making process.

1. For example, if a bank that operated in California merged with a bank that operated in the nearby state of Nevada, this would be example of a market-extension merger.
2. India’s two leading cinema franchises, INOX and PVR, merged in 2022 to establish the largest multiplex chain with over 1500 screens nationwide.
3. The companies provided slightly different products, but since both had to do with the electronic industry, they were able to combine technologies and competencies.
4. An example of this kind of a merger could be the merger of a clothing brand and a textile factory.

When two companies in the same supply chain merge, this is called a vertical merger. These mergers give the new company more control over additional parts of the supply chain to better oversee quality or gain synergies. Another vertical merger example occurred when Live Nation and Ticketmaster merged. Ticketmaster sells event tickets, while Live Nation promotes concerts, so the goal of the combination was to reduce ticket prices paid by customers.

The tax losses of the acquired company help the acquiring company to lower its tax liability. While acquiring a company, tax benefits are considered, where one company realises significant taxable income while the other incurs tax loss carryforwards. Moreover, if the company you are doing a congeneric merger with also has a good reputation, adding their name to yours can suggest that your business has grown in the meantime. Typically, a congeneric merger happens when one company with an existing product line acquires another company to add to that line. If you are interested in congeneric mergers and what they can do for you, then this article prepared by our DealRoom team should be able to give you the basic information on that.

Merger and Acquisition in India

Greatly affected by the cheap plans
offered by Reliance Jio, a price war ensued in the
telecommunication sector. As the telecom business became
increasingly competitive, Vodafone India and Idea Cellular Limited,
two of the then biggest companies, struggled. Vodafone and Idea launched
its new corporate identity, ‘Vi,’ which marked the
culmination of the two businesses’ unification. This merger is
estimated to be worth $23,000,000,000/- (United States Dollar
twenty-three billion only). In today’s world, the concept of mergers and acquisitions is becoming increasingly popular.

As the value of a company’s products and services is recognized, it may expand over time. Mergers & Acquisitions could be part of a company’s strategy to grow market share, expand geographically, lessen competition, profit from patents, or even enter new markets. As a result, businesses take advantage of other companies that are underperforming or governments that are willing to sell their assets. In contrast to a congeneric merger, where the target and the acquirer are in similar industries, a conglomerate merger occurs between companies that are in no way related. Often, the two companies involved engage in completely different industries with very little overlap in the way they operate their businesses.

Come Up with a Merger Plan

Clear can also help you in getting your business registered for Goods & Services Tax Law. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

Merger And Amalgamation Under The Companies Act,2013

Zomato, an online food delivery and restaurant discovery platform, has purchased the Indian operations of Uber Eats, Uber’s food delivery service, for roughly $350 million. The all-stock transaction gives the ride-hailing giant a 10% stake in Zomato. The decision was intended to reduce losses in the ride-hailing startup’s food delivery service in India, which has been a source of revenue for the company.

A well-executed merger permits for higher returns for buyers within the type of higher shareholder worth, decreased operational prices for corporations, and increased revenueand sales. Through M&A, companies search for more diversification of their choices, augmented manufacturing capacity, concentric merger example in india elevated market share, and better utilization of operations. The corporations that agree to merge are roughly equal in terms of size, clients, scale of operations, and so on. Acquisitions, in contrast to mergers, or generally not voluntary and contain one firm actively buying another.

The second type of merger is called a vertical merger, and it is when two companies combine that are in different stages of the supply chain. A supply chain refers to the process of production, sales, or distribution. A recent example of a vertical merger would be between Live Nation and Ticketmaster.

The Ultimate Guide to Concentric Mergers

In a horizontal merger, companies can get a high market share and the power to influence prices. Vertical mergers also lead to market power since the company will control the entire supply chain without disturbances in supply. The most relevant as well as recent merger that helped save two companies and at the same time was effective in improving competition in the Telcom industry in India, was the Vodafone-Idea merger. Vodafone, formerly India’s second largest telecommunications company was under a debt close to 9000 crores in the year 2017. Idea, formerly the third largest player in the industry was also under a huge debt around the same time.

How is it different from other merger types?

The Uber Eats brand in India will cease to exist, and all its customers will be transferred to Zomato’s app. Zomato’s fleet will include delivery partners who were formerly involved with Uber Eats India, according to Goyal of Zomato. At the time of the transaction, Kraft was a leading producer of mayonnaise, salad dressing, cottage cheese, natural cheese and lunch meat.

This leads to technological economies such as the elimination of the costs of searching for prices, contracting, payment, collecting and advertising. Also, a shoe producing company S  taking over a leather producing company L is another example of a vertical merger. This merger is basically https://1investing.in/ executed to take advantage of the reduced production cost, increased efficiency and profit maximisation. In March 2021, Wipro acquired UK-based Information
Technology consulting company Capco for $1.500,000,000/- (United
States Dollar one billion five hundred million only).

This acquisition could be a part of Tata
group’s strategy for aviation business as the group also holds
a majority interest in AirAsia India and Vistara, a joint venture
with Singapore Airlines. Arcelor took the first step to thwart the acquisition by putting its subsidiary, Dofasco, under a trust and using the poison pill tactic to keep Mittal from buying the company. Mittal Steel’s ability to complete the transaction was hampered as a result of this. Mittal agreed to a 45 per cent stake cap and offered 12 of the 18 board seats to independent directors, including union representatives, and a one-year lock-in on his shares.

In India, businesses consider mergers and acquisitions a critical business strategy tool. Companies that complete a conglomerate merger often experience more growth and diversification outside their core industry or customer base. On the other hand, these company mergers can lead to possible culture clashes that result in employee attrition. In some cases, companies that complete these types of acquisitions become less efficient and profitable because their business operations aren’t focused.