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us by clicking the bell ican friends I welcome you to the tutorial on what exactly is Amalgamation amalgamation
so let's begin before getting inside on what amalgamation is that is understand it in early
layman's language amalgamation is nothing but a kind of marriage ok just like a marriage
to individual come together to form a union in this 2 more anti ties come together for carrying
out the business activities so they are done with a view to get an advantage in the form
of tax benefit let's economies of scale increasing capital or elimination of competition extra
it is always say that you are better than one United anyone can stay can stand actually
stronger and amalgamation is of significance to the entities involved in the same on amalgamation
discusses couple of things we are going to take cover examples to show that start with
the first thing what exactly is amalgamation to start with the basics the most commonly
adopted definition of amalgamation is amalgamation is a combination of two or more companies
in to a into an new entity company A and company B be combined together to form a new company
that is entity C second amalgamation also includes absorption so what is absorption
absorption is basically means that the company a company b and b is round up I'll show you
a chart on the same so that will be able to get clear Idea on the same as you can see
over here a + b it makes to see amalgamation is a combination of two or more companies
into a new entity A and B are combined to form a new company called c and absorption is
basically a is acquiring b to existing company is taking over B to B is completely roundup
most commonly used terms in amalgamation was referring to the companies are transfer a
company and transferee company so just in case you are confused over here the transfer
is the transferor and transferee so the transfer is the amalgamating company and the transfer
is the amalgamated company now let's discuss the type of amalgamation first the first one
is amalgamation in the nature of merger some writing want to hear amalgamation in the nature
of merger now this say to be nature mergers satisfaction of 5 conditions 1st all the assets in liabilities the transferor company becomes
after the amalgamation the Assets and liabilities of the transferee company second the shareholders
holding not less than 90% the face value of equity shares of the transfer company other
than the equity shares already hello there in immediately before the amalgamation by
the transferee company subsidiaries of the nominees become equity shareholders of the
transferee company by the virtue of amalgamation consideration for the amalgamation receivable
by those equity shareholders of the transferor company who agrees to become equity shareholders
of the transferee company is discharged by the transferee company only by the equity
shares in transferee company accept that the cash in respect of the fractional shares business
of the transferor company is intended to be carried out on after the amalgamation by the
transferee company and last no just one is intended to be made to the book values of
the assets in the address of the transferor company and when they are incorporated in
the financial statement the transferee company accept to ensure uniformity of accounting
policies second method is called the amalgamation in the nature of purchase the first one was
merger with 5 conditions II that we are starting is amalgamation in the nature of
purchase then it is said to be the nature of the Purchase so now let's see the method
of accounting the method of accounting is there to accounting methods the amalgamation
that is first amalgamation in the nature of merger is accounted on the basis of pulling
of interest method so it is accounted based on pooling of interest method in the amalgamation
in the nature of purchase is accounted on the basis of purchase method as mentioned
in the first lines now let's consideration needs formal as mentioned in the previous conversation on this particular
topic of What U Turn there are various motives behind amalgamation briefly first it helps
in availment of various tax benefit many times amalgamation takes place is a measure of the
tax planning second by an time through ways of amalgamation company takes advantage of
large economies of scale III it also helps in elimination of the competition among the
similar Group of Industries sometimes it also helps in creating a monopoly in the market
it is always used as the icon of the growth in general increases the value of the companies
prospects of the financial and capital growth and development 6th is provide Synergy benefits benefits Y2 popular
word related with amalgamation in simple term it means a benefit that is due to the combination
so what is the process of amalgamation the following procedures are adopted for amalgamation
Legal procedure that is the first one during the entire process of the amalgamation one
has to take care of the various set of laws rules regulation legislation the applicability
of different laws changes from case to case every amalgamation has to be considered separately
for determining the Ambit of the capital applicable loss also it very from country to country
that I'll give an example in that in India the company law the cellular the RBI rules
and regulations fema of Income Tax Act so and so forth as to be followed this loss provide legal framework to all the
activities carried out under the scheme of amalgamation drafting of the scheme of amalgamation
conducting board meetings getting board approval consent of shareholders firing various forms
of with ROC informing the stockholders a stock exchanges advertisements in newspapers
extra are the we of the legal steps involved in the amalgamation everything needs to be done within
the legal horizon of respective countries now let's see what are the other procedure they are various other procedure involved process of amalgamation now eliminate few of them 1st diligence conduct for the corporate restructured reforms like process of amalgamation
gives fair idea about the deals are aspects in so there exist different kind of due diligence suggest financial due
diligence legal due diligence operation due diligence extra second evaluation is done
for the business which are getting amalgamated basically Preamble Commission valuation and
post amalgamation evaluation is done in compared to know the value of worth of the amalgamation
evaluation is altogether of very broad area which is subjective exercise based on upon
assumption next comes the deal which is presented by 12 the others with whom it
intended to get amalgamation of the deal is TDS task many negotiations takes place
in the process of amalgamation negotiations is also a very important skill as it is very
much required to come upon a successful Conclusion and finalization of a deal cost benefit analysis
before entering into any amalgamation the sharing of bearing of such causes to be decided
in advance finally a legal agreement signed between the parties for amalgamation the real
test after the commencement of humiliation should be successful should not confirm it
self to only what post amalgamation operation should work as well for the results the companies
were expecting from such process of amalgamation now i wont;be Commission now I want to solve the problems of amalgamation
shall get you to that point is the law of nature first I mean we all would agree with
the point that changed is a difficult and not easily welcome by us same goes for the
mergers second their culture difference is special in in in case of gross border mergers
people don't work in harmonium in there are signs of discontentment it is not possible
to get ready for facing trials and tribulations fourth the attitude of the management is not
always friendly the hostel kind of attitude the management is a sign of danger for any
amalgamation i tell u some of the termolies which are used in mergers and migration the first one is known
as bootstrapping earning if you have ever heard about boot trapping earning this is
the increase in the Earning per share as a result of a merger combined with market use
of the pre-merger P ratio to the value of the post mergers earning per ratio second is called The Godfather
offer that means the godfather offer is a very lucrative of which nobody can refuse
the third is called killer bees that call killer bees this is only one remedy in the
last resort The Killer bees are the legal form the public relation forms in the investment
bankers who helped to deal with the force and friendly hostile takeovers know the next
one is call radar alert is a radar very alert is in simple term is the watchman of the company
it keeps watch on the market of the contains update on the trading in the price of a stock
if any suspicious transactions over purchase is the company shares takes place it immediately
takes actions against the same as this may be a sign of a silent 100 acquisitions the
next is call horizontal merger if anyone ever heard about what is horizontal merger that
would be really good see mergers between companies who have similar line of business is called
horizontal merger and and this call another call vertical merger see merger between the companies
who have common life of production but different stages of production thats call vertical merger
another is called conglomerate merger between completely and related companies of
different line of business having understood this concept now let's have a look on some
significant amalgamation in the recent past which will provide is every claims on the
real happening in the world show you so the real examples on amalgamation in recent time
the first one is hens and craft foods most interesting merger to study for many of us
is his and craft food wondering why because we love food don't be apart from this following
are some of the noteworthy points you know that this merger has in it this much was important
for the reason that involved combination of two joints in the food industry help in augmentation
of annual sales in establishing the major market share in the world most visible in
United States this benefits were expected on the Merger form International growth in
Economics of scale because savings were expected as a result of the combined operations different
strategies adopted to cut the cost so the cost of the merger was approximately was close
up to $42 billion the merger was known as the horizontal merger example that I want
to take is of heavy workout Toyota the next merger Toyota merger Toyota merger Toyota merger
pickerel in kind of a merger earned unique kind feature observed in the merger of is that they believe in expansion
through the internal means see merger took to play took to place between two subsidiaries of
the same Parent company over here at the motive behind this kind of Merger is improvement of
the internal processes utilizing the strength of each other and trending communication the
next everyone should know about this and E bay & Payable everyone was fascinated by payable payable if
you know about Elon Musk right even so reason behind e bay payable merger was dependency on each other other people
was dependent on eBay for majority of income the payment businesses are dependent on the
volume of the transaction the people was dependent on eBay for its volume is this merger could
not continue for a long again eBay & Payable started the ways approximately after 12 years
of Unity the cost of the merger was approximately on $1.5 billion and the people was getting
owned by if I am not wrong Elon Musk who is a Revolutionary person know the next is the
chemical and due point
see this merger took place because the investors wanted to have a better diversify portfolio
for the investment the do.
Was into the seas industry and I was also into the chemical industry of merger of this
rare industry was statically planned to achieve the best position in the field of agriculture
the cost of the merger was approximately on $130 billion in merger is a kind of
a vertical merger example that I want to take a Sitcom and travellers group this merger to
create one of the biggest merger in the sector of the financial service of Banking insurance
and Investment Corporation this was done to bring business various clients together to make use of
the financial services and work in to invest in the market the moon would increase the
client based on the individual level through this measures investment products are made
available to all kinds of customers the cost of merger was approximately closure of 21
40 billion dollars in conclusion after going through all the examples in the concepts in
a nutshell we can I write a conclusion that both are dependent on various factor was there
is a reason behind every merger reactivity the merger is long exercise very multiple
course of action have to be conducted to arrive at a decision weather the merger will be fruitful
or not a little mistake cost heavily boat to the transfer as well as a transfer company
it is also be true that all the merger don't put the successful just like some marriages
head towards divorce mergers can also sometimes leads to separation there is no after every
time not every merger takeover is supported by the shareholders in management when they are not conveyance about
your Idea merger they feel insecure against the proposed of amalgamation to defect that
disapproval they take help of various takeover defense mechanism suggest poison poison pills
Golden parachute Batman defense white and defense defense Crown jewels Green Man and
so on and so for the strategies are equal interesting as the names and the two companies
gets amalgamated what a new journey starts from the very.
To make this sure shot of success efforts have to be made at the post amalgamation state
the amalgamation should bring about the optimum utilization of resources the companies have
to continuously Strike for continuous growth and development so that's it for this particular
topic if you have learnt enjoyed watching this video please like and comment on this
video and subscribe to our channel for the latest updates thank you everyone cheers
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More examples
Amalgamation: the combination of two or more commercial companies
Fusion: an occurrence that involves the production of a union
(merge) unify: become one; "Germany unified officially in 1990"; "the cells merge"
(merge) blend: mix together different elements; "The colors blend well"
(merge) unite: join or combine; "We merged our resources"
(merged) incorporate: formed or united into a whole
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