MERGERS AND ACQUISITIONSMergers and acquisitions are the most popular means of corporaterestructuring or business combinations in comparison to amalgamation,takeovers, spin-offs, leverage buy-outs, buy-back of shares, capital reorganisation, sale of business units and assets etc. Corporaterestructuring refers to the changes in ownership, business mix, assetsmix and alliances with a motive to increase the value of shareholders. Toachieve the objective of wealth maximisation, a company should2 continuously evaluate its portfolio of business, capital mix, ownershipand assets arrangements to find out opportunities for increasing thewealth of shareholders. There is a great deal of confusion anddisagreement regarding the precise meaning of terms relating to thebusiness combinations, i.e. mergers, acquisition, take-over,amalgamation and consolidation. Although the economic considerationsin terms of motives and effect of business combinations are similar butthe legal procedures involved are different. The mergers/amalgamationsof corporates constitute a subject-matter of the Companies Act and theacquisition/takeover fall under the purview of the Security and ExchangeBoard of India (SEBI) and the stock exchange listing agreements.
Elaborating the financing techniques