MERGER & ACQUISITION IN INDIA

Abstract

Merger and Acquisition have become a routine feature than an exception in the present day business scenario. In a merger companies join up with each other sharing their resources to reach a common goal. Shareholders of both the entities continue as join owners of the merged entity. In an acquisition , as the denotes, one firm out rightly purchases the assets or shares or both of another company whose shareholders lose their claim on the acquired outfit once the deal is over. As businesses expanding with diversification becoming the order of day, merger and acquisition are being adopted as strategic tools for growth. Restricting to core area makes no business sense any longer, as one can see the way both the houses of reliance are foging ahead with entry into virtually every field. Tatas are rewriting their corporate history with acquisition galore. No different is the case with the other major industrial houses. All the augurs well for our country which is poised to become an economic force to reckon with, very soon. . Winning the race to future and the rest world requires a strong sense of purpose and speed. Yet, few companies, if any, have what it takes to run the race on their own. The idea of racing as a team is somehow uplifting to the human spirit. The logic of bringing many heads together to achieve what was previously considered difficult or impossible on an individual basis is somehow compelling.

The trends towards globalization of all national and regional economies has increased the intensity of mergers, in a bid to create more focused, competitive, viable, larger players, in each industry. The recent liberalization has made mergers more necessary and acceptable. The globalization may entail redundancies and closures of inefficient units as a consequence of technological up gradation and modernization. As it open the flood gates of competition between unequal partners. The working units below average efficiency are more favorable to mergers and takeover.