Merger & Acquisition Services

Mergers and Acquisitions are also known as M and A (M&A). Mergers and Acquisitions are complex transactions between two or more entities. Around the globe, many companies utilize mergers and acquisitions services provided by consultants and investment banks.

PRATUL AGRAWAL & ASSOCIATES provide various M and A(M&A) Services to Companies and Firms. Our experienced professionals play a constructive role in understanding the business, its need with a view to help clients improve performance and operating efficiency and blend this with the sectors in which they operate.

Mergers
In a merger, the boards of directors for two companies approve the combination and seek shareholders' approval. For example, in 1998 a merger deal occurred between Digital Computers and Compaq, whereby Compaq absorbed Digital Computers. Compaq later merged with Hewlett-Packard in 2002. Compaq's pre-merger ticker symbol was CPQ. This was combined with Hewlett-Packard's ticker symbol (HWP) to create the current ticker symbol (HPQ).

Acquisitions
In a simple acquisition, the acquiring company obtains the majority stake in the acquired firm, which does not change its name or alter its organizational structure. An example of this type of transaction is Manulife Financial Corporation's 2004 acquisition of John Hancock Financial Services, where both companies preserved their names and organizational structures.

Consolidations
Consolidation creates a new company by combining core businesses and abandoning the old corporate structures. Stockholders of both companies must approve the consolidation, and subsequent to the approval, receive common equity shares in the new firm. For example, in 1998, Citicorp and Traveler's Insurance Group announced a consolidation, which resulted in Citigroup.

Tender offers
In a tender offer, one company offers to purchase the outstanding stock of the other firm, at a specific price rather than the market price. The acquiring company communicates the offer directly to the other company's shareholders, bypassing the management and board of directors. For example, in 2008, Johnson & Johnson made a tender offer to acquire Omrix Biopharmaceuticals for $438 million. While the acquiring company may continue to exist— especially if there are certain dissenting shareholders—most tender offers result in mergers.

Acquisition of assets
In an acquisition of assets, one company directly acquires the assets of another company. The company whose assets are being acquired must obtain approval from its shareholders. The purchase of assets is typical during bankruptcy proceedings, where other companies bid for various assets of the bankrupt company, which is liquidated upon the final transfer of assets to the acquiring firms.

Management acquisitions
In a management acquisition, also known as a management-led buyout (MBO), a company's executives purchase a controlling stake in another company, taking it private. These former executives often partner with a financier or former corporate officers, in an effort to help fund a transaction. Such M&A transactions are typically financed disproportionately with debt, and the majority of shareholders must approve it. For example, in 2013, Dell Corporation announced that it was acquired by its founder, Michael Dell.

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