Merger And Acquisition

MERGERS & ACQUISITIONS

MERGER

rger is a combination of two companies into one lar company

merger occurs when one firm assumes all the assets all the liabilities of another

Classifications of mergers Horizontal merger Vertical merger Market-extension merger

ACQUISITIONS

quisition is the buying of one company by an

quisitions is also known as take over or buy o

quisition is the purchase of one company by another with no new company being formed

DISTINCTION BETWEEN ACQUISITION AND MERGERS

en one company takes over another and clearly establishes the new owner, the purchase is called an acquisition. m a legal point of view, the target company ceases to exist,

he pure sense of the term, a merger happens when two firm n of about the same size, agree to go forward as a single ne mpany rather than remain separately owned and operated.

Reasons for Mergers and Acquisitions:

To produce goods or services more efficiently

Collaborating or sharing expertise may achiev gains in efficiency

HR CONTROLS • • • • • • • • •

Train managers on the nature of change Technical retraining Stress reduction program Meeting between the counter parts Orientation programs Explaining new roles Helping people who lost jobs Post merger team building Anonymous feedback helpline for employees

strategic contribution of HR for M & A activity 

The strategic contribution of HR as consisting of the “Five P’s”:

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Philosophy Policies Programs Practices Processes

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ROLE OF HUMAN RESOURCES IN MERGERS AND ACQUISITIONS

The Human Side of M&A Activity    

Retention of key talent Communications Retention of key managers Integration of corporate cultures.

HR issues in three Stage Models of Mergers and Acquisitions 

Pre-combination

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Combination and integration of the partners

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Solidification and advancement

Pre-Combination     

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Identifying reasons for the IM & A Forming IM & A team/leader Searching for potential partners Selecting a partner Planning for managing the process of the IM and/or A Planning to learn from the process

Combination and Integration        

Selecting the integration manager Designing/implementing teams Creating the new structure/strategies/ leadership Retaining key employees Motivating the employees Managing the change process Communicating to and involving stakeholders Deciding on the HR policies and practice

Solidification and Assessment       

Solidifying leadership and staffing Assessing the new strategies and structures Assessing the new culture Assessing the new HRM policies and practices Assessing the concerns of stakeholders Revising as needed Learning from the process

CONCLUSION 

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M&A is an effective and quick way to expand new market horizons M&A adapt new technology in capturing opportunities to leverage competitive advantage. It is an established fact that this is a double-edged weapon which may operate in both the ways negative and positive

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