Overview of Mergers and Acquisitions

In practice, however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it is technically an acquisition. Being bought out often carries negative connotations; therefore, by describing the deal euphemistically as a merger, deal makers and top managers try to make the takeover more palatable. An example of this would be the takeover of Chrysler by Daimler-Benz in 1999 which was widely referred to as a merger at the time.
             A purchase deal will also be called a merger when both CEOs agree that joining together is in the best interest of both of their companies. But when the deal is unfriendly (that is, when the target company does not want to be purchased) it is always regarded as an acquisition.
             2.0 OBJECTIVES:.
             Against this backdrop, this study seeks to explore best practices and insights of those professionals who have experience in completing mergers or acquisitions. The primary objectives of the study are:.
             1. To analyse the current role of HR in M&A.
             2. To enable understanding of M&A trends in the Indian context.
             3. To understand the people challenges in M&A.
             4. To understand the success factors involved.
             5. To present recommendations and conclusions based on the study.
             3.0 LITERATURE REVIEW:.
             Selden and Coven (2003) have stated that 70 -80% of acquisitions fail, meaning taht they create no wealth for the share owners of the acquiring company. Schmidt (2003) has identified five major road blocks to merger and acquisition (M&A)success, three of which are human resource issues: Inability to sustain financial performance(64%), loss of productivity(62%), incompatible cultures(56%), loss of key talent(53%) and clash of managerial styles.
             Gerpott 1993 has defineda merger as a situation when either two or more independent companies merge, or when one or more persons already controlling at least one company acquire direct or indirect control of the whole or parts of at least one undertaking.