Financial Supervision

 Financial Management Research Conventional paper

Subject: ECONOMICAL MANAGEMENT Study course Code: Meters. Com Lessons: 1 Author: Dr . Suresh Mittal Vetter: Dr . Sanjay Tiwari


1 . zero 1 . one particular 1 . 2 Objectives Advantages Mergers and acquisitions 1 ) 2 . one particular Types of Mergers 1 . 2 . two Advantages of combination and acquisition 1 . several 1 . four 1 . a few Legal process of combination and purchase Financial evaluation of a merger/acquisition Financing associated with merger/Acquisition 1 . 5. 1 Financial problems after merger and buy 1 . your five. 2 Capital structure following merger and consolidation 1 . 6 1 . 7 1 ) 8 1 ) 9 Rules of mergers and takeovers in India SEBI Guidelines for Takeovers Summary Keywords

1 . twelve Self evaluation questions 1 . 11 Advised readings


After dealing with this lessons, the students will be able to • Know the that means and advantages of merger and acquisition.

one particular

• • •

Understand the financial evaluation of a combination and buy. Elaborate acquisition. Understand polices and SEBI guidelines relating to merger and acquisition. the financing approaches of merger and


Wealth maximisation is the main objective of financial administration and progress is essential to get increasing the wealth of value shareholders. The expansion can be achieved through broadening its existing markets or perhaps entering in new markets. A company can expand/diversify its business internally or outwardly which can also be known as interior growth and external development. Internal progress requires that the company enhance its working facilities we. e. advertising, human resources, developing, research, IT etc . which usually requires a large amount of cash. Besides plenty of funds, internal growth likewise require time. Thus, not enough financial resources or time needed constrains a company's space of growth. The corporation can steer clear of these two complications by obtaining production facilities as well as other assets from outside through mergers and purchases.


Mergers and acquisitions are the many popular way of corporate reorganization, rearrangement, reshuffling or organization combinations when compared to amalgamation, takeovers, spin-offs, power buy-outs, buy-back of stocks and shares, capital reorganisation, sale of sections and resources etc . Company restructuring identifies the changes in ownership, business mix, resources mix and alliances having a motive to improve the value of shareholders. To achieve the aim of wealth maximisation, an organization should


continuously evaluate its profile of organization, capital mixture, ownership and assets preparations to find out chances for increasing the useful shareholders. There exists a great deal of dilemma and difference regarding the exact meaning of terms relating to the business mixtures, i. elizabeth. mergers, buy, take-over, combinations and consolidation. Although the economic considerations when it comes to motives and effect of business combinations are similar but the legal procedures included are different. The mergers/amalgamations of corporates constitute a subject-matter of the Businesses Act as well as the acquisition/takeover fall under the purview of the Protection and Exchange Board of India (SEBI) and the stock market listing negotiating. A merger/amalgamation refers to a mixture of two or more businesses into one business. One or more corporations may combine with a current company or perhaps they may blend to form a new company. Laws and regulations in India use the term amalgamation pertaining to merger for example , Section 2 (IA) in the Income Tax Take action, 1961 specifies amalgamation while the combination of one or more companies (called amalgamating company or companies) with one other company (called amalgamated company) or the merger of two or more companies to create a new business in such a way that almost all assets and liabilities with the amalgamating organization or companies become property and debts of the amalgamated company and shareholders having not less than nine-tenths in value of the stocks and shares in the...

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