Mergers and Acquisitions

INTRODUCTION TO

MERGERS &

ACQUISITIONS

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INTRODUCTION TO MERGERS & ACQUISITIONS:-

In a general sense, mergers and acquisitions are very similar corporate actions -

they combine two previously separate firms into a single legal entity. Significant

operational advantages can be obtained when two firms are combined and, in fact, the

goal of most mergers and acquisitions is to improve company performance and

shareholder value over the long-term.

The motivation to pursue a merger or acquisition can be considerable; a company that

combines itself with another can experience boosted economies of scale, greater sales

revenue and market share in its market, broadened diversification and increased tax

efficiency. However, the underlying business rationale and financing methodology for

mergers and acquisitions are substantially different.

A merger involves the mutual decision of two companies to combine and become one

entity; it can be seen as a decision made by two "equals". The combined business,

through structural and operational advantages secured by the merger, can cut costs and

increase profits, boosting shareholder values for both groups of shareholders. A typical

merger, in other words, involves two relatively equal companies, which combine to

become one legal entity with the goal of producing a company that is worth more than the

sum of its parts. In a merger of two corporations, the shareholders usually have their

shares in the old company exchanged for an equal number of shares in the merged entity.

A takeover, or acquisition, on the other hand, is characterized the purchase of a smaller

company by a much larger one. This combination of "unequal" can produce the same

benefits as a merger, but it does not necessarily have to be a mutual decision. A larger

company can initiate a hostile takeover of a smaller firm, which essentially amounts

to buying the company in the face of resistance from the smaller company's management.

Unlike in a merger, in an acquisition, the acquiring firm usually offers a cash price per

share to the target firm's shareholders or the acquiring firm's share's to the shareholders of

the target firm according to a specified conversion ratio. Either way, the purchasing

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company essentially finances the purchase of the target company, buying it

outright for its shareholders.

In this context, it would be essential for us to understand what corporate restructuring and

mergers and acquisitions are all about.

MERGER:-

Mergers involve the mutual decision of two companies to combine & become one

entity. The combined business can cut cost of operation & increase profit which will

boost shareholders value for both groups of shareholders. In Merger of two corporations,

shareholders usually have their shares in the old organization & are exchanged for an

equal numbers of shares in the merged entity.

According to the Oxford Dictionary “merger” means “combining of two companies into

one”. Merger is a fusion between two or more enterprises, whereby the identity of one or

more is lost and the result is a single enterprise. In merger the assets and liabilities of the

companies get vested in another company, the company that is merged losing its identity

and its shareholders becoming shareholders of the other company. All assets, liabilities

and the stock of one company are transferred to Transferee Company in consideration of

payment in the form of:

Equity shares in the transferee company,

Debentures in the transferee company,

Cash, or

A mix of the above modes.

In the pure sense, a merger happens when two firms, often of about the same size, agree

to go forward as a single new company rather than remain separately owned and

operated. This kind of action is more precisely referred to as a "merger of equals." For

example, both Daimler-Benz and Chrysler ceased to exist when the two firms merged,

and a new company, Daimler Chrysler, was created.

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ACQUISITION:-

Acquisition in general sense is acquiring the ownership in the property. In the

context of business combinations, an acquisition is the purchase by one company of a

controlling interest in the share capital of another existing company.

On the other hand, Acquisition means the purchase of a smaller company by much larger

one. A larger company can initiate an Acquisition of smaller firm which essentially

amounts to buy the company in the face of resistance from smaller company’s

management. Unlike Mergers in an Acquisition the acquiring firm usually offers a cash

price per share to target firm’s shareholders.

Acquisition means an attempt by one firm to gain majority interest in the another firm

called target firm &dispose-off it‘s assets or to take the target firm private by small group

of investors.

A company can buy another company with cash, stock or a combination of the two.

Another possibility, which is common in smaller deals, is for one company to acquire all

the assets of another company.

An acquisition may be affected by;

(a) agreement with the persons holding majority interest in the company management

like members of the board or major shareholders commanding majority of voting

power;

(b) purchase of shares in open market;

(c) to make takeover offer to the general body of shareholders;

(d) purchase of new shares by private treaty;

(e) Acquisition of share capital through the following forms of considerations viz.

means of cash, issuance of loan capital, or insurance of share capital.

There are broadly two kinds of strategies that can be employed in corporate acquisitions.

These include:

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I. Friendly Takeover:-

The acquiring firm makes a financial proposal to the target firm’s management

and board. This proposal might involve the merger of the two firms, the

consolidation of two firms, or the creation of parent/subsidiary relationship.

II. Hostile Takeover:-

A hostile takeover may not follow a preliminary attempt at a friendly takeover.

For example, it is not uncommon for an acquiring firm to embrace the target

firm’s management in what is colloquially called a bear hug.

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HISTORY OF

MERGERS AND

ACQUISITIONS

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HISTORY:-

Merger and acquisition activity in the United States has typically run in cycles,

with peaks coinciding with periods of strong business growth. U.S. merger activity has

been marked by five prominent waves: one around the turn of the twentieth century, the

second peaking in 1929, the third in the latter half of the 1960s, the fourth in the first half

of the 1980s, and the fifth in the latter half of the 1990s.

This last peak, in the final years of the twentieth century, brought very high levels of

merger activity. Bolstered by a strong stock market, businesses merged at an

unprecedented rate. The total dollar volume of mergers increased throughout the 1990s,

setting new records each year from 1994 to 1999. Many of the acquisitions involved huge

companies and enormous dollar amounts. Disney acquired ABC Capital Cities for $19

billion, Traveler's acquired Citicorp for $72.6 billion, Nation Bank acquired Bank of

America for $61.6 billion and Daimler-Benz acquired Chrysler for $39.5 billion.

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DISTINCTION

BETWEEN MERGERS

AND ACQUISITIONS

DISTINCTION BETWEEN MERGERS AND 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.

When one company takes over another and clearly established itself as the new owner,

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the purchase is called an acquisition. From a legal point of view, the target company

ceases to exist, the buyer "swallows" the business and the buyer's stock continues to be

traded.

In the pure sense of the term, a merger happens when two firms, often of about the same

size, agree to go forward as a single new company rather than remain separately owned

and operated. This kind of action is more precisely referred to as a "merger of equals."

Both companies' stocks are surrendered and new company stock is issued in its place. For

example, both Daimler-Benz and Chrysler ceased to exist when the two firms merged,

and a new company, DaimlerChrysler, was created.

In practice, however, actual mergers of equals don't happen very often. Usually, one

company will buy another and, as part of the deal's terms, simply allow the acquired firm

to proclaim that the action is a merger of equals, even if it's technically an acquisition.

Being bought out often carries negative connotations, therefore, by describing the deal as

a merger, deal makers and top managers try to make the takeover more palatable.

A purchase deal will also be called a merger when both CEOs agree that joining together

is in the best interest of both of their companies. But when the deal is unfriendly - that is,

when the target company does not want to be purchased - it is always regarded as an

acquisition.

Whether a purchase is considered a merger or an acquisition really depends on whether

the purchase is friendly or hostile and how it is announced. In other words, the real

difference lies in how the purchase is communicated to and received by the target

company's board of directors, employees and shareholders.

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TYPES OF MERGERS

TYPES OF MERGERS:-

There are three main types of mergers which are Horizontal merger, Vertical merger

& Conglomerate merger. These types are explained as follows;

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1. Horizontal Merger:-

This type of merger involves two firms that operate & compete in a similar kind

of a business. Horizontal merger is based on the assumptions that it will provide

economies of scale from the larger combined unit. The economies of scale are

obtained by the elimination of duplication of facilities, broadening the product line,

reduction in the advertising cost. Horizontal mergers also have potentials to create

monopoly power on the part of the combined firm enabling it to engage in anti-

competitive practices.

Examples: -

Mumbai - Glaxo India Limited and Smith Kline Beecham Pharmaceuticals

(India) Limited have legally merged to form GlaxoSmithKline

Pharmaceuticals Limited in India (GSK). A merger would let them pool

their research & development funds and would give the merged company a

bigger sales and marketing force.

Merger of Centurion Bank & Bank of Punjab.

Merger between Holicim & Gujarat Ambuja Cement ltd

2. Vertical Merger:-

A vertical Merger involves merger between firms that are in different stages of

production or value chain. A company involved in vertical merger usually seeks to

merge with another company or would like to takeover another company mainly to

expand its operations by backward or forward integration. The acquiring company

through merger of another units attempt to reduce inventory of raw materials and

finished goods. The basic purpose of vertical merger is to eliminate cost of searching

raw materials. Vertical merger takes place when both firm plan to integrate the

production process and capitalize on the demand for the product. A company decides

to get merged with another company when it is not in a position to get strong

position in a market because of imperfect market of intermediary product, scarcity of

resources.

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Example: - Among the Indian corporate that have emerged as big international

players is the Videocon group. The group became the third largest colour picture

tube manufacturer in the world when it announced the purchase of the colour picture

tube business of France-based Thomson SA, which includes units in Mexico, Poland

and China, for about Rs 1260 crore.

3. Conglomerate merger:-

Conglomerate mergers means mergers between firms engaged in unrelated types

of business activity. The basic purpose of such combination is utilization of

financial resources. Such type of merger enhances the overall stability of the acquirer

company and creates balance in the company’s total portfolio of diverse products and

production processes and thereby reduces the risk of instability in the firm’s cash

flows.

Conglomerate mergers can be distinguished into three types:

I. Product extension mergers These are mergers between firms in related

business activities and may also be called concentric mergers. These

mergers broaden the product lines of the firms.

II. Geographic market extension mergers: These involve a merger

between two firms operating in two different geographic areas.

III. Pure conglomerates mergers: These involve mergers between two

firms with unrelated business activities. They do not come under product

extension or market extension.

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REASONS FOR

MERGERS &

ACQUISITIONS

REASONS FOR MERGERS & ACQUISITIONS:-

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There are many reasons or factors that motivate companies to go for mergers and

acquisitions such as growth, synergy, diversification etc.

1. Growth: One of the most common reason for mergers is growth. There are

two broadways a firm can grow. The first is through internal growth. This can

be slow and ineffective if a firm is seeking to take advantage of a window of

opportunity in which it has a short-term advantage over competitors. The

faster alternative is to merge and acquire the necessary resources to achieve

competitive goals. Even though bidding firms will pay a premium to acquire

resources through mergers, this total cost is not necessarily more expensive

than internal growth, in which the firm has to incur all of the costs that the

normal trial and error process may impose. While there are exceptions, in the

vast majority of cases growth through mergers and acquisitions is significantly

faster than through internal means. Mergers can give the acquiring company

an opportunity to grow market share without having to really earn it by doing

the work themselves - instead, they buy a competitor's business for a price.

Usually, these are called horizontal mergers. For example, a beer company

may choose to buy out a smaller competing brewery, enabling the smaller

company to make more beer and sell more to its brand-loyal customers.

Example- RPG group had a turnover of only Rs. 80 crores in 1979, which has

increased to about Rs.5600 crores in1996. This phenomenal growth was due

to the acquisitions of several companies by the RPG group. Some of the

companies acquired are Asian Cables, Calcutta Electricity Supply and

Company, etc.

2. Synergy: Another commonly cited reason for mergers is the pursuit of

synergistic benefits. The most commonly used word in Mergers &

Acquisitions is synergy, which is the idea of combining business activities, for

increasing performance and reducing the costs. Essentially, a business will

attempt to merge with another business that has complementary strengths and

weaknesses. This is the new financial math that shows that 1 + 1 = 3. That is,

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as the equation shows, the combination of two firms will yield a more

valuable entity than the value of the sum of the two firms if they were

operating independently.

Value (A + B) > Value (A) + Value (B)

Although many merger partners cite synergy as the motive for their

transaction, synergistic gains are often hard to realize. There are two types of

synergy one is derived from cost economies and other one is derived from

revenue enhancement. Cost economies are the easier to achieve because they

often involve eliminating duplicate cost factors such as redundant personnel

and overhead. When such synergies are realized, the merged company

generally has lower per-unit costs. Revenue enhancing synergy is more

difficult to predict and to achieve. An example would be a situation where one

company’s capability, such as research process, is combined with another

company’s capability, such as marketing skills, to significantly increase the

combined revenues.

3. Diversification : Other reasons for mergers and acquisitions include

diversification. A company that merges to diversify may acquire another

company engaged in unrelated industry in order to reduce the impact of a

particular industry's performance on its profitability. The track record of

diversifying mergers is generally poor with a few notable exceptions. A few

firms, such as General Electric, seem to be able to grow and enhance

shareholders wealth while diversifying. However, this is the exception rather

than a norm. Diversification may be successful, but it needs more skill and

infrastructure than some firms have.

4. Economies of scale: Yes, size matters. Whether it's purchasing stationery or a

new corporate it system, a bigger company placing the orders can save more

on costs. Mergers also translate into improved purchasing power to buy

equipment or office supplies - when placing larger orders, companies have a

greater ability to negotiate prices with their suppliers. This refers to the fact

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that the combined company can often reduce duplicate departments or

operations, lowering the costs of the company relative to theoretically the

same revenue stream, thus increasing profit.

5. Increase Market Share & Revenue: This reason assumes that the company

will be absorbing a major competitor and increasing its power (by capturing

increased market share) to set prices. Companies buy companies to reach new

markets and grow revenues and earnings. A merge may expand two

companies' marketing and distribution, giving them new sales opportunities. A

merger can also improve a company's standing in the investment community:

bigger firms often have an easier time raising capital than smaller ones.

Example-Premier and Apollo Tyres,

6. Increase Supply-Chain Pricing Power : By buying out one of its suppliers or

one of the distributors, a business can eliminate a level of costs. If a company

buys out one of its suppliers, it is able to save on the margins that the supplier

was previously adding to its costs; this is known as a vertical merger. If a

company buys out a distributor; it may be able to sale its products at a lower

cost.

7. Eliminate Competition:  Many mergers and acquisitions deals allow the

acquirer to eliminate future competition and gain a larger market share in its

product's market. The downside of this is that a large premium is usually

required to convince the target company's shareholders to accept the offer. It

is not uncommon for the acquiring company's shareholders to sell their shares

and push the price lower in response to the company paying too much for the

target company.

8. Acquiring new technology: To stay competitive, companies need to stay on

top of technological developments and their business applications. By buying

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a smaller company with unique technologies, a large company can maintain or

develop a competitive edge and vice versa.

9. Procurement of production facilities: Procurement of production facilities

may be the reason for acquiring company to go for mergers and acquisition. It

is a kind of backward integration. Acquiring Firms will take the decision of

merging with another firm who supplies raw material to acquiring firm in

order to safeguard the sources of supplies of raw material or intermediary

product. It will help acquiring firm to bring economies in purchasing of raw

material. It will also help to cut down the transportation cost.

Example- Videocon takes over Thomson picture tube in China to procure

supply of picture tube required for producing television sets.

10. Market expansion strategy: Many firms go for mergers and acquisitions as

a part of market expansion strategy. Mergers and acquisitions will help the

company to eliminate competition and to protect existing market. It will also

help the firm to obtain new market for promoting their existing or obsolete

products.

For example, Lenovo takes over IBM in India to increase market for Lenovo

products like desktops, laptops in India.

11. Financial synergy: Financial synergy may be the reason for mergers and

acquisitions. Following are the financial synergy available in case of mergers

and acquisitions;

I. Better credit worthiness- This helps companies to purchase good on

credit, obtain bank loan and raise capital in the market easily.

II. Reduces cost of capital- The investors consider big firms as safe and

hence they expect lower rate of return for the capital supplied by them. So

the cost of capital reduces after merger.

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III. Increase debt capacity- After the merger the earnings and cash flows

become more stable than before. This increase the capacity of the firm to

borrow more funds.

IV. Rising of capital- After the merger due to increase in the size of the

company, better credit worthiness and reputation the company can easily

raise the capital at any time.

12. Own development plans: The purpose of mergers & acquisition is backed by

the acquiring company’s own developmental plans. A company thinks in

terms of acquiring the other company only when it has arrived at its own

development plan to expand its operation having examined its own internal

strength where it might not have any problem of taxation, accounting,

valuation, etc. but might feel resource constraints with limitations of funds

and lack of skill managerial personnel. It has to aim at suitable combination

where it could have opportunities to supplement its funds by issuance of

securities; secure additional financial facilities eliminate competition and

strengthen its market position.

13. Corporate friendliness: Although it is rare but it is true that business houses

exhibit degrees of cooperative spirit despite competitiveness in providing

rescues to each other from hostile takeovers and cultivate situations of

collaborations sharing goodwill of each other to achieve performance heights

through business combinations. The combining corporate aims at circular

combinations by pursuing this objective

14. General gains:

I. To improve its own image and attract superior managerial talents to

manage its affairs.

II. To offer better satisfaction to consumers or users of the product.

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15. Taxes: A profitable company can buy a loss maker to use the target's loss as

their advantage by reducing their tax liability. In the United States and many

other countries, rules are in place to limit the ability of profitable companies to

"shop" for loss making companies, limiting the tax motive of an acquiring

company.

Ahmadabad Cotton Mills Merged with Arvind Mills ( Rs =3.34 crores)

Sidhaper Mills merged with Reliance Industries Ltd.(Rs. 3.34 crores)

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ADVANTAGES &

DISADVANTAGES OF

MERGERS &

ACQUISITIONS

ADVANTAGES & DISADVANTAGES OF MERGERS &

ACQUISITIONS:

1) ADVANTAGES-

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Mergers and acquisitions is the permanent combination of the business which vest

management in complete control of the business of merged firm. Shareholders in the

selling company gain from the mergers and acquisitions as the premium offered to

induce acceptance of the merger or acquisitions. It offers much more price than the

book value of shares. Shareholders in the buying company gain premium in the long

run with the growth of the company.

Mergers and acquisitions are caused with the support of shareholders, managers and

promoters of the combing companies. The advantages, which motivate the

shareholders and managers to give their support to these combinations and the

resulting consequences they have to bear, are briefly noted below.

From shareholders point of view: - Shareholders are the owners of the

company so they must get be benefited from the mergers and acquisitions.

Mergers and acquisitions can affect fortune of shareholders. Shareholders

expect that investment made by them in the combining companies should

enhance when firms are merging. The sale of shares from one company’s

shareholders to another and holding investment in shares should give rise

to greater values. Following are the advantages that would be generally

available in each merger and acquisition from the point of view of

shareholders;

1. Face value of the share is increased.

2. Shareholders will get more returns on the investments made by

them in the combining companies.

3. Sale of shares from one company’s shareholder to another is

possible.

4. Shareholders get better investment opportunities in mergers and

acquisitions.

From managers point of view: - Managers are concerned with improving

operations of the company, managing the affairs of the company

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effectively for all round gains and growth of the company which will

provide them better deals in raising their status, perks and fringe benefits.

Mergers where all these things are the guaranteed outcome get support

from the managers.

From Promoters point of view: -

1. Mergers offer company’s promoters advantages of increase in the

size of their company, financial structure and financial strength.

2. Mergers can convert closely held and private limited company

into public limited company without contributing much wealth and

losing control of promoters over the company.

From Consumers point of view: - Consumers are the king of the market

so they must get some benefits from mergers and acquisitions. Benefits in

favour of the consumer will depend upon the fact whether or not mergers

increase or decrease competitive economic and productive activity which

directly affects the degree of welfare of the consumers through changes in

the price level, quality of the products and after sales service etc.

Following are the benefits that consumers may derive from mergers and

acquisitions transactions;

1. Low price & better quality goods: - The economic gains realized

from mergers and acquisitions are passed on to consumers in the

form of low priced and better quality goods.

2. Improve standard of living of the consumers: - Low priced and

better quality products directly improves standard of living of the

consumers.

2) DISADVANTAGES-

Merger or acquisition of two companies in the same field or in diverse field may involve

reduction in the number of competing firms in an industry and tend to dilute competition

in the market. They generally contribute directly to the concentration of economic power

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and are likely to lead the merger entities to a dominant position of market power. It may

result in lesser substitutes in the market, which would affect consumer’s welfare. Yet

another disadvantage may surface, if a large undertaking after merger because of

resulting dominance becomes complacent and suffers from deterioration over the years in

its performance. Following are some disadvantages of mergers and acquisitions;

Creates monopoly- when two firms merged together they get dominating

position in the market which may lead to create monopoly in the market.

Leads to unemployment-Raiders shouldn’t have the right to buy up firms they

have no idea how to run – the employees who have spent their lives building up

the firm should be making the decisions.

Raiders become filthy rich without producing anything, at the expense of

hardworking people who do produce something.

M&A damages the morale and productivity of firms.

Corporate debt levels have risen to dangerous levels.

Managers pressured to forego long-term investment in favour of short-term profit.

Shareholders may be payed lesser dividend if the firm is not making profits. There

may be a possibility that shareholders would be paid less returns on investment if

the company is not earning enough profit.

Corporate raiders use their control to strip assets from the target, make a quick

profit, destroying the company in the process, throwing people out of work.

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PROCEDURE OF

MERGER

PROCEDURE OF MERGER:

1. Search for merger partner- The first step in mergers is to search for merger

partner. The top management may use their own contact in the same line of

economic activity or in the other diversified field which could be identified as a

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better merger partners. Such identification should be based on the detail

information of the merger partners collected from public and private sources.

2. Agreement between the two companies- The beginning of actual merger

procedure starts with agreement between the merging companies, but mere

agreement does not provide legal cover to the transaction unless it is sanctioned

by the Court under section 391 of Companies Act 1956.

3. Scheme of merger – The scheme of merger should be prepared by the companies

which have taken decision of merging. There is no specific form prescribed for

scheme of merger but scheme should contain following information;

Particulars about the merging companies.

Main terms of transfer of assets and liabilities from transferor to

transferee.

Conditions of conducting business.

Particulars about share capital of merging companies specifying

authorized capital issued capital and paid up capital.

Description of proposed profit sharing ratio and any condition attached to

it.

Conditions about payment of dividend.

Status of employees of the merging companies and also status of provident

fund, gratuity fund or any funds created for the benefits of existing

employees.

Treatment of debit balance of merging companies.

Miscellaneous provisions covering income tax dues, contingencies and

other accounting entries.

4. Approval of Board Of Directors for the scheme- The scheme for merger must

be approved by the respective Board Of Directors of transferor and transferee

companies.

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5. Approval of scheme by financial institutions- The Board of Directors should in

fact approve the scheme after it has been approved by the financial institutes,

debenture holders, banks which have granted loans to the companies. Approval of

Reserve Bank of India is also needed.

6. Application to the Court- The next step is to make an application under section

39(1) of Indian Companies Act 1956 to the High Court for getting permission for

merging between companies.

7. Approval of scheme by the Court- On the receipt of the application for merger

the Court will decide whether to approve the scheme of merger or not. Once the

Court has approved the application then firms can merged.

8. Transfer of assets and liabilities- The High Court has the power to give order

for transfer of any property from Transferor Company to Transferee Company.

By the virtue of such order assets and liabilities of the Transferor Company shall

automatically stand transferred to Transferee Company.

9. Allotment of shares to shareholders of transferor company- By the virtue of

sanctioned scheme of merger, the shareholders of Transferor Company are

entitled to get shares in Transferee Company in the exchange of ratio provided

under the said scheme.

10. Intimation to stock exchanges- After merger is effected; the company which

takes over assets and liabilities of the Transferor Company should apply to the

Stock Exchanges where its securities are listed, for listing the new shares allotted

to the shareholders of the company.

11. Public announcement- Public announcement of merger is mandatory as required

under SEBI regulations. The Transferee Company shall appoint merchant bank to

make a public announcement of merger on the behalf of Transferee Company.

Public announcement shall be made at least in one national English daily one

Hindi daily and one regional language daily newspaper of that place where the

shares of that company are listed and traded. Public announcement should be

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made within four days from finalization of negotiations or entering into any

agreement of merger. Public announcement should contain following information;

Paid up share capital of the transferee company, the number of fully paid up

and partially paid up shares.

The minimum offer price for each fully paid up or partly paid up share.

Mode of payment of consideration.

Salient features of the agreement, if any, such as the date, the name of the

seller, the price at which the shares are being acquired, the manner of payment

of the consideration and the number and percentage of shares in respect of

which the acquirer has entered into the agreement to acquire the shares or the

consideration, monetary or otherwise, for the acquisition of control over the

transferee company, as the case may be;

Objects and purpose of the mergers and acquisitions and the future plans of

the transferor company for the transferee company. Provided that where the

future plans are set out, the public announcement shall also set out how the

transferor proposes to implement such future plans.

The date by which individual letter of offer would be posted to each of the

shareholder.

The date of opening and closure of the offer and the manner in which and the

date by which the acceptance or rejection of the offer would be communicated

to the share holders.

The date by which the payment of consideration would be made for the shares

in respect of which the offer has been accepted.

Approvals of banks or financial institutions required, if any;

Such other information as is essential for the shareholders to make them

informed about the offer.

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MERGERS AND

ACQUISITIONS

VALUATION MATTERS

MERGERS AND ACQUISITIONS VALUATION MATTERS:-

Investors in a company that are aiming to take over another one must determine

whether the purchase will be beneficial to them. In order to do so, they must ask

themselves how much the company being acquired is really worth. Naturally, both sides

of a mergers and acquisitions deal will have different ideas about the worth of a target

company. The seller will tend to value the company at highest price as possible, while the

buyer will try to get the lowest price that he can. There are, however, many legitimate

ways to value companies. The most common method is to look at comparable companies

in an industry, but deal makers employ a variety of other methods and tools when

assessing a target company. Following are some methods that are employed by the

merging firms;

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1. Comparative Ratios - The following are two examples of the many comparative

metrics on which acquiring companies may base their offers:

Price-Earnings Ratio (P/E Ratio) - With the use of this ratio, an

acquiring company makes an offer that is a multiple of the earnings of

the target company. Looking at the P/E for all the stocks within the

same industry group will give the acquiring company good guidance

for what the target's P/E multiple should be.

Enterprise-Value-to-Sales Ratio (EV/Sales) - With this ratio, the

acquiring company makes an offer as a multiple of the revenues,

again, while being aware of the price-to-sales ratio of other companies

in the industry.

2. Replacement Cost - In a few cases, acquisitions are based on the cost of

replacing the target company. For simplicity's sake, suppose the value of a

company is simply the sum of all its equipment and staffing costs. The acquiring

company can literally order the target to sell at that price, or it will create a

competitor for the same cost. Naturally, it takes a long time to assemble good

management, acquire property and get the right equipment. This method of

establishing a price certainly wouldn't make much sense in a service industry

where the key assets - people and ideas - are hard to value and develop.

3. Discounted Cash Flow (DCF) - A key valuation tool in mergers and

acquisitions, discounted cash flow analysis determines a company's current value

according to its estimated future cash flows. Forecasted free cash flows (net

income + depreciation/amortization - capital expenditures - change in working

capital) are discounted to a present value using the company's weighted average

costs of capital (WACC). Admittedly, DCF is tricky to get right, but few tools can

rival this valuation method.

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PARTICIPANTS TO

MERGERS AND

ACQUISITIONS

PARTICIPANTS IN MERGERS AND ACQUISITIONS:-

Mergers and Acquisitions process requires highly skilled and qualified group of

advisers. Each advisor specializes in a specific aspect of the merger and acquisition

process. The role played by such advisers or professional experts are as follows;

1. Investment bankers: Investment banking is one of the most important

department in the process of mergers and acquisitions. It is fee based adviser

department which works with the company that wish to acquire other company or

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with industries that wish to purchase a smaller industry. The main role of

investment banks is to provide finance for mergers and acquisitions transactions.

2. Lawyers: The legal framework surrounding a typical transaction has become so

complicated that no one individual can have sufficient expertise to address all the

issues. In large and complicated transactions, legal teams consists of more than

one dozen lawyers each of them represents specialized aspects of law. Lawyers

are expected to perform all legal proceedings.

3. Accountants: Services provided by accountants include advice on the optimal

tax structure, financial structuring and performing financial due diligence. A

transaction can be structured in many different ways, with each having different

tax implications for the parties involved. Tax accountants are vital in determining

the appropriate tax structure. Accountants also perform the role of auditors by

reviewing the transferor company’s financial statements and operations through a

series of interviews with senior and middle level managers.

4. Valuation experts: They may be appointed either by the bidder or the Transferor

Company to determine the value of the transferor company. They build models

that incorporate various assumptions such as costs or revenue growth rate.

5. Institutional investors: They include public and private pension funds, insurance

companies, banks, mutual funds. Collection of institutions can influence firm’s

action. They invest their money in the company.

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SUCCESS & FAILURE OF

MERGERS &

ACQUISITIONS

SUCCESS & FAILURE OF MERGERS & ACQUISITIONS:-

1. Factors responsible for successful mergers and acquisitions

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The success of merger depends upon many critical factors but the main factor is that

Transferor Company should buy Transferee Company at right time, at right place and at

right cost. Just because of company is for sale and another company can afford buying

that company is not good reason to do a deal. The success of mergers and acquisitions

depend on how realistic deal makers are and how well they can integrate two companies

while maintaining day-to-day operations. There are several key ingredients that need to

come together for merger and acquisitions to be successful;

I. Strategy- Strategy is the basis for any merger and acquisition. Company should be

able to express in one sentence the motive behind merger and acquisition. If the

transferor company is not able to express the motive for doing a deal for merger

then the deal should not be done. There are many strategic reasons to buy a

company some of them are listed as follows;

Acquire Innovative technical skills.

Obtain new markets and customer.

Enhance product line.

II. Motive- Buying company i.e. transferor company does not know reasons why

another company is being sold. It should ask reasons for selling the company.

Transferor Company should also try to know what selling company knows about

the business that they are not telling potential buyers. After knowing all reasons for

selling a company buying company would be in a position to decide whether to go

for a deal or not. If they are going for deal then buying company should decide

appropriate price for the deal. Buying company should also examine its own motive

for wanting to acquire the company, whether it is good asset for the company that

would enhance the market of buying company.

III. Price- A low price does not always equate to a good deal, but higher the price; it is

fewer cushions for unexpected problems. Buying company is often forced to pay

more price than they want to pay for the deal. In a competitive situation the buying

company needs to decide how much it is willing to pay and not exceed that level,

even if it means losing the company. However, in any merger and acquisition there

is a pricing range, based on different assumptions of the future performance of the

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merger and acquisition. The buying company has to decide the price to offer for the

deal, or how risk will be divided between shareholders of merging company. .

IV. POST MERGER MANAGEMENT- For a merger to succeed much work a

remains after the deal has been signed. The strategy and business model of the old

firms may no longer be appropriate when a new firm is formed. Each firm is unique

and presents it’s own set of problems and solutions. It takes a systematic effort to

combine two or more companies after they have come under a single ownership.

V. DUE DILIGENCE- Due diligence means, “A large part of what makes a deal

successful after completing it, is what is being done before completing it”. Before

the closing of the deal, the buyer should engage in a thorough due diligence review

of the sellers business. The purpose of the review is to detect any financial and the

business risk that the buyer might inherit from the seller. The due diligence team

can identify ways in which assets, process and other resources can be combined in

order to realize cost saving and other expected synergies. The planning team can

also try to understand the necessary sequencing of events and resulting pace at

which the expected synergies may be realized.

2. Factors responsible for failure of mergers and acquisitions

As there are many factors responsible for success of mergers similarly there are many

factors responsible for failure of the merger. The main factor is buying wrong company at

wrong time, at wrong place and by paying wrong price. If the process through which

merger is executed is faulty then it will affect merger adversely. Historical trends show

that roughly two thirds of big mergers will disappoint on their own terms, which means

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they will lose value on the stock market. Some of reasons for failure of mergers and

acquisitions are listed below;

I. Payment of high price- The merger fails when the maximum price is paid to

buy another company. In such situation shareholders of Transferee Company

will receive more cash but the shareholders of Transferor Company will pay

more cash. As a result of this deal for merger will fail.

II. Culture clash- Lack of proper communication, differing expectations and

conflicting management styles due to differences in corporate culture contribute

to failure in implementing plan and therefore, failure of mergers and

acquisitions.

III. Overstated synergies: - An acquisition can create opportunities of synergy by

increasing revenues, reducing costs, reducing net working capital and improving

the investment intensity. Over estimation of such synergies may lead to a failure

of this merger. Inability to prepare plans leads to failure of mergers and

acquisitions.

IV. Failure to integrate operations- Once firms are merged management must be

prepared to adapt plans in favour of changed circumstances. Inability to prepare

plans leads to failure of mergers and acquisitions.

V. Inadequate due diligence- The process of the due diligence helps in detecting

any financial and business risks that the buyer might inherit from the seller.

Inadequate due diligence results in the failure of the mergers and acquisitions.

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MERGERS AND

ACQUISITIONS

DIFFICULTIES

MERGERS AND ACQUISITIONS DIFFICULTIES:-

No marketplace currently exists for the mergers and acquisitions of privately-owned

small to mid-sized companies. Market participants often wish to maintain a level of

secrecy about their efforts to buy or sell such companies. Their concern for secrecy

usually arises from the possible negative reactions a company's employees, bankers,

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suppliers, customers and others might have if the effort or interest to seek a transaction

were to become known. At present, the process by which a company is bought or sold

can prove difficult, slow and expensive. A transaction typically requires six to nine

months and involves many steps. Locating parties with whom to conduct a transaction

forms one step in the overall process and perhaps the most difficult one. Qualified and

interested buyers of multimillion dollar corporations are hard to find. Even more

difficulty is to bring a number of potential buyers forward simultaneously during

negotiations. Potential acquirers in industry simply cannot effectively "monitor" the

economy at large for acquisition opportunities even though some may fit well within their

company's operations or plans.

An industry of professional "middlemen" (known variously as intermediaries, business

brokers, and investment bankers) exists to facilitate mergers and acquisitions

transactions. These professionals do not provide their services cheaply and generally

resort to previously-established personal contacts, direct-calling campaigns, and placing

advertisements in various media. In servicing their clients they attempt to create a one-

time market for a one-time transaction. Many but not all transactions use intermediaries

on one or both sides. Despite best intentions, intermediaries can operate inefficiently

because of the slow and limiting nature of having to rely heavily on telephone

communications. Many phone calls fail to contact with the intended party. Busy

executives tend to be impatient when dealing with sales calls concerning opportunities in

which they have no interest. These marketing problems typify any private negotiated

markets.

The market inefficiencies can prove detrimental for this important sector of the economy.

Beyond the intermediaries' high fees, the current process for mergers and acquisitions has

the effect of causing private companies to initially sell their shares at a significant

discount. Furthermore, it is likely that since privately-held companies are so difficult to

sell they are not sold as often as they might or should be.

Previous attempts to streamline the mergers and acquisitions process through computers

have failed to succeed on a large scale because they have provided mere "bulletin boards"

hence; it becomes difficult to maintain secrecy. There is a need of a method for

efficiently executing mergers and acquisitions transactions without compromising the

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confidentiality of parties involved and without the unauthorized release of information

which is difficult rather almost impossible. It's no secret that plenty of mergers don't

work.

Those who advocate mergers will argue that the merger will cut costs or boost revenues

by more than enough to justify the price premium. It can sound so simple: just combine

computer systems, merge a few departments, use sheer size to force down the price of

supplies and the merged giant should be more profitable than its parts but to apply all

these things in practical is very difficult. In other words, in theory, 1+1 = 3 sounds great,

but in practice, it is not so easy.

Another difficulty may be Government rules and regulations. Countries like India do not

allow foreign companies to enter into the domestic market. Thus foreign companies are

forced to merge with Indian company to enter into Indian market even though they have

the power and funds to enter in India alone that is without merging with any other

company.

Example- 1) Wal-Mart is trying to enter into Indian market by merging with

Bharti telecom.

Historical trends show that roughly two thirds of big mergers will disappoint on their own

terms, which means they will lose value on the stock market. The motivations that drive

mergers can be flawed and efficiencies from economies of scale may prove elusive. In

many cases, the problems associated with trying to make merged companies work are all

too concrete.

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FINANCING MERGERS

AND ACQUISITIONS

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FINANCING MERGERS AND ACQUISITIONS:-

Mergers are generally differentiated from acquisitions partly by the way in which they

are financed and partly by the relative size of the companies. Various methods of

financing an M&A deal exist:

1. Cash- Payment by cash such transactions are usually termed acquisitions rather

than mergers because the shareholders of the target company are removed from

the picture and the target comes under the control of the acquirer's shareholders

alone.

2. Financing- Financing cash can be borrowed from a bank, or raised by an issue of

bonds. Mergers and Acquisitions financed through debt are known as leveraged

buyouts, and the debt will often be moved down onto the balance sheet of the

acquired company. A cash deal would make more sense during a downward trend

in the interest rates. Another advantage of using cash for mergers and acquisition

is that there tends to lesser chances of EPS dilution for the acquiring company.

But a caveat in using cash is that it places constraints on the cash flow of the

company.

3. Hybrids- Mergers and acquisition can involve a combination of cash and debt, or

a combination of cash and stock of the purchasing entity.

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TRENDS & OVERVIEW

IN MERGERS AND

ACQUISITIONS

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TRENDS & OVERVIEW IN MERGERS AND ACQUISITIONS:-

For the period January-August 2006, 533 mergers and acquisitions worth Rs 59741 crore

were announcement from January 2006 till august 2006, compared to the 790 deals

aggregating Rs 52804 crore for the same period a year ago.

While the number of Acquisition deals Announced was 48 percent lower as compared as

to previous year, the consideration amount was more than 12 percent. For the same

period, 69 open offers amounting to a consideration of Rs 6714 crore were announced.

Last quarter April-June and July-August recorded 270 and 176 mergers and acquisitions

respectively and their consideration was 18229 crore.71 acquisition was recorded in the

month of August only and the consideration amounting to 9409 crore.11 open offers in

the remaining part of the year.8 offers were made by Indian Companies and 3 by foreign

multinationals. Largest offer was made by Oracle Corporations to shareholders of I-flex.

Largest Acquisition was made by Reliance Industries to acquire 37.95 percent equity in

Reliance Energy for a consideration of 2662 crore.

Mergers saw a downswing in the last quarter of the fiscal year 2005.June-August 2005

saw 66 mergers as compared to 51 mergers recorded for the same period in the previous

year. However in the monthly trend, 36 mergers were recorded as compared to 17

mergers in August 2005.

August 2006 recorded companies like Anand Inds and Clariant Group announcing

mergers of their subsidiaries merging their subsidiaries into themselves to bring synergy

into their business activities. The merger in the following months was not satisfactory.

August 2007 recorded merger of Air India and Indian Airlines into a new entity

National Aviation Company of India.

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INDUSTRY WISE TREND

IN NUMBERS OF

MERGERS AND

ACQUISITIONS

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INDUSTRY WISE TREND OF NUMBERS OF MERGERS-

Year (05- 06)

Serial no Industry Numbers

1 Food and Beverages 40

2 Textiles (cotton, synthetic) 28

3 Chemical 43

4 Fertilizers & Pesticides 10

5 Tyres & Tubes 6

6 Cement 5

7 Metal 9

8 Machinery 15

9 Electronics 28

10 Computers Software 16

11 Automobile Industry 2

12 Manufacturing & Mining 16

13 Electricity 3

14

Transport &

Communication 6

15 Finance industry 38

16 Others 98

Total 363

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INDUSTRY WISE TREND OF VALUE AND NUMBERS OF

ACQUISITIONS - Year (2005- 2006)

Serial no Industry Numbers Value (Rs crore)

1 Food and Beverages 108 6396

2 Textiles 124 7320

3 Chemical 119 10417

4

Fertilizers &

Pesticides 46 2975

5 Tyres & Tubes 27 7539

6 Cement 21 7485

7 Metal 42 928

8 Machinery 45 2951

9 Electronics 112 10126

10 Computers Software 88 9003

11

Automobile

Industry 46 4570

12

Manufacturing &

Mining 73 3619

13 Electricity 11 4178

14

Transport &

Communication 27 9951

15 Finance industry 65 6937

16 Others 232 24427

Total 1186 118822

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MAJOR MERGERS AND

ACQUISITIONS

MAJOR MERGERS AND ACQUISITIONS:-

Top 10 M&A deals worldwide (value in mil $)

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Year Purchaser PurchasedTransaction value

(in mil. USD)

1999Vodafone Airtouch

PLCMannesmann 183,000

1999 Pfizer Warner-Lambert 90,000

1999 Citicorp Travelers Group 73,000

1999 Vodafone GroupAir Touch

Communications60,000

2002 Pfizer Inc. Pharmacia Corporation 59,515

2004 Sanofi-Synthelabo

SA

Aventis SA 60,243

2000 Glaxo Wellcome

Plc.

SmithKline Beecham

Plc.

75,961

2001 Comcast

Corporation

AT&T Broadband &

Internet Svcs

72,041

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SOME EXAMPLES OF

MERGERS AND

ACQUISITIONS

SOME EXAMPLES OF MERGERS AND ACQUISITIONS:-

GlaxoSmithKline Pharmaceuticals Limited, India

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Glaxo India Limited and SmithKline Beecham Pharmaceuticals (India) Limited have

legally merged to form GlaxoSmithKline Pharmaceuticals Limited in India (GSK). It

may be recalled here that the global merger of the two companies came into effect in

December 2000.

Commenting on the prospects of GSK in India, Vice Chairman and Managing Director,

GlaxoSmithKline Pharmaceuticals Limited, India, Mr. V Thyagarajan said, “The two

companies that have merged to become GlaxoSmithKline in India have a great heritage –

a fact that gets reflected in their products with strong brand equity.” He added, “The two

companies have a long history of commitment to India and enjoy a very good reputation

with doctors, patients, regulatory authorities and trade bodies. At GSK it would be our

endeavor to leverage these strengths to further consolidate our market leadership.”

GlaxoSmithKline, India

The merger in India brings together two strong companies to create a formidable

presence in the domestic market with a market share of about 7 per cent. With this

merger, GlaxoSmithKline has increased its reach significantly in India. With a field force

of over 2,000 employees and more than 5,000 stockiest, the company’s products are

available across the country. The enhanced basket of products of GlaxoSmithKline, India

will help serve patients better by strengthening the hands of doctors by offering superior

treatment and healthcare solutions.

GlaxoSmithKline, Worldwide

GlaxoSmithKline is the world’s leading research-based pharmaceutical and healthcare

company, with an R&D budget of over ₤2.3 billion (Rs.16, 130 crores). GlaxoSmithKline

has a powerful research and development capability, encompassing the application of

genetics, genomics, combinatorial chemistry and other leading edge technologies. A truly

global organization with a wide geographic spread, GlaxoSmithKline has its corporate

headquarters in the West London, UK. The company has over 100,000 employees and

supplies its products to 140 markets around the world. It has one of the largest sales and

marketing operations in the global pharmaceutical industry.

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MERGER OF LENOVO AND IBM December 2004

International Business Machines Corp.(IBM) has agreed to sell its personal computer

business to China's largest personal computer maker, Lenovo Group Ltd., for US$1.25

billion. The sale brings to a close a major chapter in IBM's pioneering PC business that it

started in 1981.

The agreement calls for Lenovo to pay IBM $650 million in cash, $600 million in

Lenovo Group common stock and for Lenovo to assume $500 million in net balance

sheet liabilities from IBM. Lenovo took over IBM's desktop PC business, including

research and development and manufacturing.

IBM will own an 18% stake in the new established PC Company, and will let it continue

to use the IBM brand as well as other trademarks on PC's and notebook computers. The

new company will become the number three maker of PCs behind Dell Inc. and Hewlett-

Packard Co. The new company will be based in New York, with principal operations in

Beijing and. It is expected that 2,500 IBM employees will join the new company.

Lenovo Group Ltd. has purchased $1.75 billion PCs from IBM Inc, creating the third-

largest personal computer vendor in the world and giving IBM greater entry into the

rapidly growing Chinese market. Lenovo will gain control of IBM's Think Centre

desktop and popular ThinkPad notebook brands, as well as the thousands of customers

who buy those products.

Customer reaction to the deal when it was first announced in December was mixed, but

IBM executives were aggressive in getting out the message that the quality of the

products, services and support would not change.

Lenovo will operate two divisions—Lenovo International, which is essentially the old

IBM PC business, and Lenovo China, the company's Chinese business.

The main purpose of IBM to merge with Lenovo is that to give competition to Dell Inc.

(world’s largest PC manufacturer) in China. Reason for Lenovo to merge with IBM is to

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enter into US market. After the merger Dell Inc. announced that it would discontinue

selling their lower end PCs in China because it was nit able to compete on price of local

manufacturer.

MERGER OF INDIAN AIRLINES AND AIR INDIA

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The merger of Air India and Indian Airlines cleared the last legal hurdle on 24 th August

2007 with corporate affairs ministry giving its green signal, setting the creation of mega

national airline. State-owned carriers Air-India and Indian Airlines)were formally merged

on Friday after the Ministry of Corporate Affairs gave its formal approval to the merger

of the two carriers, which will have a combined fleet of 112 carriers.

The merger carrier would have about 34000 employees and equity base of Rs 150 crore.

Air India would have total fleet of 112 by 2011-12 when all the planes ordered by two

carriers are delivered.

The two airlines were merged into a new company -- National Aviation Company of

India Ltd-- a government release said.

V Thulasidas will be the chairman while Vishwapati Trivedi will be managing director of

the new company that will fly under the brand name 'Air India'. The merged entity will

operate on the domestic and as well as international sectors, the release said. 

Air-India will have a combined fleet of 112 aircraft and will be among the top 10 airlines

in Asia and among the leading 30 airlines globally.As a part of its fleet acquisition

program of 112 aircraft, the new airline will induct 21 new aircraft this year including

seven Boeing 777s, 10 A-320s and 4 Boeing 737-800 this year. Air India has already

launched its inaugural flight between Mumbai and New York as a joint entity from

August 1. This is the first time a national carrier is offering a non-stop flight between

India and the United States.

Air India has already launched its inaugural flight between Mumbai and New York as a

joint entity from August 1. This is the first time a national carrier is offering a non-stop

flight between India and the United States.

Air India will have two more brands along with the main carrier, its low-cost arm Air

India Express (which will operate on international and domestic sectors) and Air India

cargo.

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The airline also plans to tie up with one of the aircraft manufacturer for a maintenance,

repair and overhaul facility which will also serve as a strategic business unit for the

airline the statement said.

MERGER OF MITTAL AND ARCELOR

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It seems that finally Arcelor is relenting. Some rumors state that Arcelor's CEO Guy

Dolle may recommend Mittal's offer to the board. Some say that Mittal will increase his

bid. It seems the 5 month long saga may be reaching its climax soon.

June 23 - Mittal Steel Co., the world's largest steelmaker, said it's approaching an

agreement to buy Arcelor SA that would end a five-month struggle and lead to the

biggest steel-industry merger.

The two companies will continue talks on Mittal's 24 billion-euro ($30 billion) offer

today and tomorrow, Sudhir Maheshwari, Mittal's managing director for business

development and treasury, said in an interview today. Luc Scheer, a spokesman for

Arcelor in Luxembourg, declined to comment. Arcelor's board is scheduled to meet June

25.

Mittal may increase its offer by 3 billion euros, which would value each Arcelor share at

40.62 euros, according to Bloomberg calculations before it was 36.04 euros per Arcelor

share.

Mittal has already increased its offer, first made Jan. 27, by 34 percent. As part of the

improved terms, billionaire Chairman Lakshmi Mittal agreed to eliminate his preferential

voting rights in the combined company.

Mittal is now offering to give Arcelor shareholders more than half the new company's

shares and keep Dolle as CEO, the Wall Street Journal reported today. Lakshmi Mittal

would probably be chairman or president, according to the report.

Mittal needs Arcelor to control 10 percent of global steel production. If Arcelor merges

with Mittal’s, it will replace Mittal as the world's biggest producer of steel.

Mittal’s Steel shareholders on Tuesday approved the merger with Arcelor Mittal, paving

the way for the merger between Mittal and Arcelor, expected to conclude later this year.

Mittal Steel won approval from 98.8 % of its shareholders present or represented by

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proxy voting to merge with Arcelor Mittal. Mittal Steel, incorporated in the Netherlands,

is finalizing its merger with Arcelor in a two-step process, to create a company governed

by Luxembourg law, Mittal Steel said during its extraordinary shareholders meeting held

in Amsterdam.

CONCLUSION:-

One size doesn't fit all. Many companies find that the best way to get ahead is to expand

ownership boundaries through mergers and acquisitions. At least in theory, mergers

provide economies of scale by expanding operations and cutting costs. Investors can take

comfort in the idea that a merger will deliver enhanced market power.

Now a day, many companies are taking decision to go for merger and acquisitions to

expand their business. But, the procedure for merger is time consuming it almost takes 6

to 7 months. Therefore, most of the mergers and acquisitions are not completed.

Mergers and acquisition transactions are often affected by government rules and

regulations, most of the countries do not allowed foreign companies to enter into local

market alone. Such foreign companies can enter only when they make merger with any

local company.

The current trend shows that there is decline in the number of mergers and acquisitions.

It is because of mergers and acquisitions transactions the needs of expertise persons have

increased. Expertise persons include valuation expert, lawyers, accountants, etc.

Merger and acquisition will give positive result only when it is executed properly.

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BIBLIOGRAPHY:-

1. CMIE Reports

2. Economic Times

3. DNA money

4. Essentials of Business Environment – K. Ashwathapa

5. Business Environment – Kale Ahmed

WEBLIOGRAOHY:

1. www.bseindia.com

2. www.yahoo.com (links and search data)

3. www.google.co.in (links and search data)

4. www.investopedia.com

5. http://en.wikipedia.org/wiki/Mergers_and_acquisitions"

6. www.chartadvisor.com (term of the day)

7. www.moneycontrol.com

8. www.lenovo.com

9. www.hindubusiness.com

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