Merger process, Other Management

Assignment Help:

The merger process

We learnt how to aligning M and A with corporate strategy. Now, let us study how the merger process takes place. The merger process is carried out in two ways.  One is through the formation of a new company (NewCo). The other one is the merging of one or many companies into another company, with the effect that the acquiring companies keep hold of their uniqueness. The principle of merger is of a financial or business nature. The merging of two companies allows for the creation of cost synergies such as the administration, production and listing costs. It also allows for a better geological coverage with a positive impact on revenue and the likelihood of additional development. The stages of the merger process are:

1. Planning.

2. Resolution.

3. Implementation.

Now let us go through in detail with the three stages of the merger process.

Planning: The most complex part of the merger process is planning which involves analysis, action plan and negotiation with the parties involved in it. The planning stage can take any amount of time, but after its completion, the merger process is on the way. The planning stage also includes the following:

  • The signing of the letter of intent that starts off the negotiation.
  • The appointment of advisors who take part in the role of consultants, examining the strengths, weakness, opportunities and threats of the merger.
  • The maintenance of deadline, conditions and type of transaction which can be merger by integration or through the formation of a new company.
  • The maintenance of export report based on the consistency of the share exchange ratio, for the companies involved.

Resolution: The resolution stage needs the approval of the management and the shareholders involved in the merger plan. The resolution stage also includes the following:

  • The board of directors arrange meeting with extraordinary stakeholders' whose item on the agenda is the merger proposal.
  • The extraordinary shareholders' meeting is called to overtake a resolution on the item on the agenda.
  • The opposition to the merger that comes from the creditors or bondholders must be limited to within 60 days of the resolution.
  • The evaluation of the impact of the merger is undertaken by the Italian Antitrust Authority, which imposes any requirement as a precondition for approving the merger.

Implementation: It is the concluding stage of the merger process. This includes the enrolment of the merger act into the company register. The period of time occupied by the medium size or big mergers is one year from the start up of the negotiation to the finish of transaction. This is because, the issue relating to the share exchange ratio among the merger companies is hardly accepted by the parties with no drawn-out negotiation. The shareholders  possibly  will  deal  without  constraint  the  new  shares  and benefit from all rights.


Related Discussions:- Merger process

Current awareness services, Current Awareness Services: Current awaren...

Current Awareness Services: Current awareness services are designed to keep the user abreast of information in thier area of work or interest that has recently been published

Commercial risks and political risks, Question 1 As a trader in order to b...

Question 1 As a trader in order to be competitive and successful, how can you address some risks that are peculiar to foreign trade like commercial risks and political risks?

Demerits of dictionary catalogue, Demerits of dictionary catalogue: Th...

Demerits of dictionary catalogue: The alphabetical arrangement of entries in one sequence is at once the strength and weakness of a dictionary catalogue. The subject entries g

Working of enterprise project management within the model, Working of EPM w...

Working of EPM within the model The replica of the enterprise functions provides the foundation for implementing a rigorous move to selecting projects that have both strategic

Library catalogue code - library management , Library catalogue code: ...

Library catalogue code: A library catalogue code, one or two of which (for, there are a score of the them), as you may have surely become familiar with to some extent, can be

Caselets, Mr. Vincent, the Manager of a large supermarket, was taking a man...

Mr. Vincent, the Manager of a large supermarket, was taking a management course in the evening programme at the local college. The Professor had given an interesting but disturbing

Human resources planning development, Plan, design, deliver, and evaluate a...

Plan, design, deliver, and evaluate an original training or HRD development program that you might use in your organization or one that you are very familiar with.

Catalogue code - technical processing, Catalogue Code: As with classif...

Catalogue Code: As with classification schemes, there are different catalogue codes available for use in libraries. Two of them are already known to you as they are prescribed

Disadvantages of the first past the post electoral system, QUESTION 1 O...

QUESTION 1 Outline the constitutional and political history of Mauritius from 1947 to 1959 with reference to (i) the right to vote (ii) the partial transfer of power through

Pestel analysis of the macro-environment, QUESTION 1 Explain each of th...

QUESTION 1 Explain each of the following concepts- (a) PESTEL analysis of the macro-environment (b) Porter's five forces (c) Value chain analysis QUESTION 2 Th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd