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Assignment on Merger and Acquisition

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Added on  2019-10-16

Assignment on Merger and Acquisition

   Added on 2019-10-16

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Table of ContentsIntroduction......................................................................................................Page No.2Justification of choice for selection of the company..............................................Page No.3Profitability before and after merger................................................................Page No.4-13Rationale & Theories relating to the merger....................................................Page No.4-13Announcements.................................................................................................Page No.14Conclusion & Recommendations......................................................................Page No.15References........................................................................................................Page No.16-17Merger & AcquisitionPage 1
Assignment on Merger and Acquisition_1
IntroductionOne plus one is more than two. This is the benefit of merger and acquisition. A company in order to expand needs resources. One company itself has limitations regarding raising additional resources, the resources which it can raise through equity or debt, is limited and inorder to expand into different countries of the world it takes huge time and resources to expand and diversify. In order to expand in a short span of time, the company can enter into an amalgamation with the companies already existing in different markets of the world. Thiswill benefit the company as it will not be required to deploy time and resources. It can buy the stake in a company, and such existing company becomes a subsidiary of the holding company.In many cases, the existing company may suffer a downfall with regards to continuous losses or fall in market share. Under such circumstances, the market price of the share keeps on declining. In order to save such company from being wound up, another existing company carrying on the same business or other business takes up such company and does the restructuring part. It is a very tedious and time-consuming process to form a company and get it listed on the stock exchangeMerger & AcquisitionPage 2
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Justification of choice for selection of the companyThere occurred so many amalgamations in the history of mankind. But specifically I choose the amalgamation of two banks located in the continent Asia. These two banks were located in the country India. India is the largest democratic country in the world second highest population in the world. The two banks that amalgamated are United Western Bank and Industrial Development Bank of India (INDUSTRIAL DEVELOPMENT BANK OF INDIA). The basic reason for selection is that the information regarding the project is easily available over the internet. Further, the bank, that amalgamated with INDUSTRIAL DEVELOPMENT BANK OF INDIA, was the largest private sector bank in the country. This amalgamation was done due to so much internal mismanagement done within the bank.This amalgamation diverted the attention of the Government to make the rules and regulation stricter. I got to learn the importance of rules and regulations that should be strictly followed. Banks work for the benefit of the general public and not for the personal benefit of any relative of the employees working in the bank. The banks need to strengthen the internal controls regarding passing the loan and limiting the purpose for which the loan should be utilized by the receiver of the loanMerger & AcquisitionPage 3
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Profitability Before and After Merger&Rationale & Theories Relating to Merger(Financial Analysis in ‘000s)(All the data has been taken from the annual report of IDBI bank available at the website ofthe bank)Merger & AcquisitionPage 4
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