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What is the Meaning of Mergers and Acquisitions? • Mergers and Acquisitions often called as M&A in short form. • Companies globally adopt these strategies to grow or survive in the competitive market. • The merger has been defined as the combination of two or more business entities to make a new entity. • The acquisition, on the other hand, involves one party selling out to another wherein the buying party combines both the entities to make it into a single entity. • In the layman language, the merger is an agreement that is based upon the two existing companies that pursuit to form an all-new company. • A merger is basically done for the purpose of expansion of business unit • To broaden the hands in every corner of the market making an entry to new segments for gaining market limelight. • Whereas, the acquisition is when an existing company or new company acquires the other company with a legal agreement is called the acquisition.
How can M&A take place? Mergers and acquisitions can take place through the following: • Purchasing common shares; • Purchasing assets; • Exchanging shares for assets; • Exchanging shares for shares.
Mergers and Acquisitions Advisory Firms • It is the wish of every businessman to grow his business and there are two ways for the process it can be either through internal growth or external expansion. • External expansion is by way of following the process of merger and acquisition and this path is very popular among companies as it helps in crossing trade barriers, enables free of capital across countries and combats the increased globalized competitiveness. • In merger two companies combine together with new name. And in acquisition, one company buys the other company.
M&A Advisory Services • Mergers and Acquisitions in India have been evaluated at USD 61.26 billion in 2017-18 whereas it was USD 27.62 billion in the previous financial year, 2016-17. • Mergers and Acquisitions are great means to achieve growth for a company but involve complex steps and processes to be followed by the involved entities to form the new business. • The Companies Act, 1956 and 2013 needs to be followed for M&A to get through, with involvement from Court, SEBI (Securities Exchange Board of India) in case of listed companies, the Central Government in the form of an Official Liquidator (OL) and the Regional Director of the Ministry of Corporate Affairs etc. • Since there are different parties involved, the process is long drawn, tedious and at times problematic.
M&A Advisory Firms • Audit & Accounting Firms – these firms specialize in auditing, accounting, and taxation matters. • They provide expert financial advice as M&A advisory firms. • Consulting and M&A advisory firms – these firms provide dedicated M&A support whether it is cross-industry or cross-border as their team has industry experts to help decide the best M&A strategy.
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