Merger and Acquisition
Survival and development of companies in the present competitive
world requires adoption of strategies for promoting their competitive
situation. In such condition, a most basic strategy is making decision
concerning merger and acquisition. Such decisions have to be made strategically,
intelligently and skillfully by financial managers and other senior managers of
companies. These decisions affect an organization’s long-term destiny and in
case all aspects of the same are failed to be studied comprehensively and in an
integrative manner, it might seriously endanger the strategic interests of both
organizations. Optimal merger and acquisition services include the services
required for purchase, sale, merger and spinoff of companies, in such a manner
that it may optimize and accelerate the growth trend of the company and create
value for both acquiring company and the acquired company.
Reasons of Merger and Purchase
1) To get access to more customers, as well as
higher cash flow؛
2) To take advantage of new technologies and
To boost income and also increase in the share
To scale up profit and combined effort؛
5) To prevent the rivals’ development؛
To get access to new resources and achieve
integration into supply chain system (vertical)؛
Types of Mergers
In respect of Production Chain
Horizontal Merger: Two companies produce similar
products in a certain industry; in other words, two companies are directly
competing with each other and have similar product line and market.
- Vertical Merger: Where two companies produce
various parts of a product and they are in the production chain of a product.
In respect of Finance
Purchase Merger: A situation in which a company
purchases another company in cash or by publishing debt instruments.
- Consolidation Merger: A situation in which a
company is formed with a new trade mark and both merged companies are founded under
such new company.
- Reverse Merger: A situation in which a
private joint stock company buys most of the shares in a public joint
stock company so that it controls that company and becomes a public company
itself without incurring the cost and spending the time required for an initial
In respect of Marketing Strategy
Market Extension Merger: Merger of two companies
which separately sell similar products.
Product Extension Merger: Merger of two
companies which sell two different, but related, products in a market.
of two companies which have no common business field with each other, i.e., they
are active in two different industries.
- Congeneric/ Concentric Merger: Merger of two
companies of similar industries, but they have different buyers, customer and
suppliers, like merger of a bank and a leasing company.
Supported by knowledge and operational knowledge of our
experienced specialists, and upon consideration of all aspects, our Company
provides comprehensive services in process of merger and acquisition for both
the buyer and seller. Such services include consultation concerning strategic
decisions in respect of merger, acquisition spinoff and defensive measures
against merger and acquisition.
We also offer some other consultation services as follows:
1) To provide fair analytic reports concerning interests
and losses due to merger and acquisition.
2) To take into consideration of all aspects, such
as business cycle of the relevant organization and industry, supply chain and
many other cases.
To carry out analysis on the financial
statements by taking into consideration of the effects of transaction and
assessment of its potential financial and operational risks.
To do valuation and propose appropriate and fair
prices and follow up and do other required cases.
To frequently hold discussions with relevant
parties and institutions.
To provide re-structuring services after merger,
acquisition and spinoff processes.