Difference between Mergers & Acquisitions:

Difference between Mergers & Acquisitions:Presenters:IfrahDifference between Mergers & Acquisitions:Although they are often uttered in the same breath and used as though they were synonymous, the terms merger and acquisition mean slightly different things

Mergers:A merger is a combination of two companies to form a new company.

In the pure sense of the term, a merger happens when two firms, agree to go forward as a single new company rather than remain separately owned and operated.

Both companies' stocks are surrendered and new company stock is issued in its place.3Insert a map of your country.amalgamationMERGERS TYPES OF Mergers :HorizontalVerticalConglomerateHorizontal Merger:Companies producing similar kinds commodities or similar type of businesses merge with each other

Mergers Examples:Exxon and Mobil

Big oil got even bigger in 1999, when Exxon and Mobil signed an $81 billion agreement to merge and form ExxonMobil.

Mergers Examples:

Mergers Examples:Daimler Benz and Chrysler

In 1998, Mercedes-Benz manufacturer Daimler Benz merged with US auto maker Chrysler to create Daimler Chrysler for $37 billion.

Vertical Merger:Merger between two companies producing different goods or services

2 companies that may not compete with each other, but exist in the same supply chain. An automobile company joining with a parts supplier would be an example of a vertical merger Mergers Examples:Disney and Pixar

The merger of legendary Walt Disney and everything-we-create-kids-adore Pixar was a match made in cartoon heaven.

CONGLOMORATE Mergers :A merger between firms that are involved in totally unrelated business activities

There are two types of conglomerate mergers: pure and mixed.

Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.Mergers Examples:Walt Disney and ABC company

AcquisitionsAn acquisition is the purchase of one company by another in which no new company is formed

From a legal point of view, target companyceases to exist, the buyer "swallows" the business and the buyer's stock continues to be traded.

It is considered negative in nature.TakeoverAcquisitionsTypes of Acquisitions:Friendly acquisitionReverse acquisitionHostile acquisition

Friendly Acquisitions :Both the companies approve of the acquisition under friendly terms. There is no forceful acquisition and the entire process is cordial.

Example:Johnsons n Johnsons acquired Dutch Crucell

Example:Google and YouTube

Hostile acquisitions:

Here, as the name suggests, the entire process is done by force.

The smaller company is either driven to such a condition that it has no option but to say yes to the acquisition to save its skin or the bigger company just buys off all its share, their by establishing majority and hence initiating the acquisition.Example:Google acquired Motorola

Reverse acquisitions:

A type of acquisition where a private company acquires a public companyExample:American West Airlines acquired US Airways

Differences between joint ventures and ALLIANCES joint ventures and ALLIANCESThey are common in technology, manufacturing and commercial real estate development, and whenever a company wants to expand its sales or operations into a foreign country.

joint venturesWhen two companies invest funds into creating a third, jointly owned company, that new subsidiary is called a joint venture

Because the joint venture can access assets, knowledge and funds from both of its partners it can combine the best features of those companies without altering the parent companies

joint venturesThe new company is an ongoing entity that will be in business for itself, but profits are owned by the parents.

In a joint venture, the companies start and invest in a new company that's jointly owned by both of the parent companies.

EXAMPLES:Caterpillar tractors & Mitsubishi industries

EXAMPLES:SONY ERICSSONJaguar Land rover - cherry

Strategic alliancesIs a voluntary, formal arrangement between two or more parties to pool resources to achieve a common set of objectives that meet critical needs while remaining independent entities

Strategic alliances involve exchange, sharing, or co development of products, services, procedures, and processesEXAMPLES:Starbucks partnered with Barnes and Nobles bookstores in 1993 to provide in-house coffee shops, benefiting both retailers.

Starbucks partnered with Pepsico to bottle, distribute and sell the popular coffee-based drink, Frappacino

A Starbucks-United Airlines alliance has resulted in their coffee being offered on flights with the Starbucks logo on the cups.