25-08-2017, 09:32 PM
Mergers & Acquisitions
Mergers.ppt (Size: 178 KB / Downloads: 24)
Why not?
Grasping for a company simply because it’s on the market, or because a competitor wants to buy it .
Overpayment or misguided purchase
Reduce cost of debt.
Diverse Business; Unmanageable
Leaping without looking at the value; Win-Win or no deal
Inability to integrate well.
Mechanics of a Merger
Legal Procedure
The MOA to be scrutinised
Intimation to Stock Exchanges
Approval of draft amalgamation proposal
Application to the Court
Notice to shareholders and creditors
Filing the order
Transfer of assets and liabilities
Issue of shares and debentures
Tax Aspects
Section 2(a) of the Income Tax Act defines amalgamation
Depreciation for tax purposes
Accumulated losses
Unabsorbed Depreciation
Capital Gains Tax
Accounting for Amalgamation is done according to Accounting Standard 14 (AS-14) issued by the Institute of Chartered Accountants of India
Screening Potential Deals
Never stop looking
Constantly scanning marketplace
Be diligent and disciplined
Do not simply react whenever IBanks contact you
Look at various potentials in the market, not just the deal at hand
Don’t cast strategy aside in the face of an exciting opportunity
Making the Deal Happen
Identify the details critical to the deal’s success
Use early negotiations to foster a sense of trust with the target’s top executives
Know who have influence on the deal – target company and your company
Don’t focus on the price yet
Keeping a foot on the brakes