Accounting for Business Combinations: Merger Analysis and Impact

This report delves into the accounting practices surrounding business combinations, specifically focusing on mergers. It examines the merger of Bendigo Adelaide Bank, providing a detailed analysis of the rationale behind the combination and its impact on various stakeholders. The report highlights the benefits of the merger, such as increased shareholder value, expanded career opportunities, and improved customer service through a wider range of products and services. Furthermore, it explores the financial advantages, including enhanced financial profiles and market capitalization. The analysis also considers the expansion of branch networks and the creation of a more robust and diversified business structure, ultimately leading to greater value for both customers and shareholders. The report concludes by emphasizing the significance of mergers in creating value and introducing new products, underscoring the importance of strategic business combinations in the financial sector.

Running head: ACCOUNTING FOR BUSINESS COMBINATIONS
Accounting for Business Combinations
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1ACCOUNTING FOR BUSINESS COMBINATIONS
Table of Contents
Introduction......................................................................................................................................2
Conclusion.......................................................................................................................................3
References........................................................................................................................................4

2ACCOUNTING FOR BUSINESS COMBINATIONS
Introduction
In general business combinations are a common way to for the companies to expand in
terms of its size rather than able to gain only a temporary benefit pertaining to the internal
activities. At the time of the business combination it has been seen that the acquirer reports the
consolidated results which combines the financial statements with those of the acquire. Bendigo
Adelaide Bank formed the merger with Adelaide Bank in 2007. The merger process was
implemented by the “Scheme of Arrangement of Adelaide Bank”. The various discourse of the
study aims to highlight the rationale for the merger activity (Bendigobank.com.au. 2018).
Discussion
The intention of business combination of both the banks is seen with the various activities
to create a unique partner focused and customer focused financial entity. The merger rationale
was also seen to be based on bringing the specialist skills among the various type the workers
and ensure delivery of a more cost-effective solution for the customers and business partners.
The combination process is further seen to be committed to create a sustainable value for the
shareholders. Some of the main rationale for the bank post merge process is recognised to be
depicted with the various types of the career opportunities with a more large and diversified
operations. The head office functions will be split among the existing sites and the main form of
the combination will be depicted with the 4000 staff across every state and territory in Australia.
In addition to this, the partners in both the bank is depicted to be getting the continued support
with the partnership model. These partners will further see a greater variety in from of the
product access. This is further seen to be backed by processing capability post combination of
both the banks (Bendigobank.com.au. 2018).
Some of the other rationale is considered with the focus on increasing the value of the
shareholders in the company with an enhanced financial profile and market capitalisation of $ 4
Billion. Some of the main form of the financial advantages for the merger process has been seen
to be based on creating a diversified business and improving the loan management system which
was lacking in both the bank before the combination process. It is recognised that the presence of
the larger wealth management sector after the combination process will be conducive in
enlarging the overall business structure of the company and at the same time the bank will be

3ACCOUNTING FOR BUSINESS COMBINATIONS
able to gain the increased market capitalisation of $ 4 billion in the ASX 100 index. The banks
will be further able to witness 80,000 retail shareholders. In addition to this, the national
expansion is also considered with covering the branch support in more than 380 branches
covering all States and Territories (Bendigobank.com.au. 2018).
Some of the various types of the rationale for the merger process was recognised to be
evident with customers having greater access across more number of products they will be able
to gain access to more number of ATM through more than 380 company with a single bank
account. These factors are seen to directly conducive to improve the current account and savings
account worth. Moreover, the community account will be able to grow in terms of the different
type the aspects of the capacity for growth in “South Australian” branch network
(Bendigobank.com.au. 2018).
Henceforth, it has been seen that the result of the merger was complementary to both the
banks thereby creating major opportunities to such communities who were seeking for long term
service with the banks. It is further discerned that the overall merger process was introduced with
the reason for foreshadowing of pre-tax profit increase of than 50%. In term of the Adelaide
Bank, pre-merger the bank suffered from limited access to the branches in South Australia.
Bendigo is known as the leader for having the access to a large number of branch network in
Australia and with the support of Bendigo bank the banks will be able expand the business for
themselves and the customers (Motley Fool Australia 2016).
Conclusion
The important depiction for the merger process is discerned with creating more value for
the customer and able to introduce new form of the products. The various types of the other
significant advantages are considered with to create a sustainable value for the shareholders. The
various types of the career opportunities with a more large and diversified operations. The head
office functions will be split among the existing sites and the main form of the combination will
be depicted with the allotment of 4000 staff across every state and territory in Australia.

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References
Bendigobank.com.au. (2018). Adelaide Bank and Bendigo Bank announce intention to merge -
Bendigo Bank. [online] Available at:
https://www.bendigobank.com.au/news-and-media/news/news-archive/adelaide-bank-and-
bendigo-bank-announce-intention-to-merge [Accessed 13 May 2018].
Bendigobank.com.au. (2018). Bendigo Bank and First Australian to merge - Bendigo Bank.
[online] Available at: https://www.bendigobank.com.au/public/news-and-media/news/news-
archive/bendigo-bank-and-first-australian-to-merge [Accessed 13 May 2018].
Bendigobank.com.au. (2018). Bendigo Bank confirms conditional merger proposal received
from Bank of Queensland - Bendigo Bank. [online] Available at:
https://www.bendigobank.com.au/news-and-media/news/news-archive/bendigo-bank-confirms-
conditional-merger-proposal-received-from-bank-of-queensland [Accessed 13 May 2018].
Motley Fool Australia. (2016). Why I’m selling my Bendigo and Adelaide Bank Ltd shares.
[online] Available at: https://www.fool.com.au/2016/11/30/why-im-selling-my-bendigo-and-
adelaide-bank-ltd-shares/ [Accessed 13 May 2018].