Submitted By Chiranjit Bardhan (sec-C)

Gourab Deb (sec-B)

Gaurav Chettri (sec-A)

Joy Saha (sec-A)

Koushik Das (sec A)

Partha Bhowmik (sec C)

Rajat Pal (sec-A)

Tamnoy Saha (sec-C)

A report on Merger, Joint Venture and Strategic Alliance……

An Introduction With Topics

Merger

Joint Venture &

Strategic

Alliance

Presented By Gourab Deb Sec – B Roll - 17

What is Merger ?

Merger is an absorption of one or more companies by a single existing company.“

i.e. America West + US Airways

What is Joint Venture ?

A joint venture is typically a business agreement between two or more businesses for the purpose of a mutually beneficial sales transaction for a product or service. Each party will combine resources and agree upon a shared percentage of the profits or a fee.

i.e.

What is Strategic alliance

Agreement for cooperation among two or more independent firms to work together toward common

objectives. Unlike in a joint venture, firms in a strategic alliance do not form a new entity to

further their aims but collaborate while remaining apart and distinct

Strategic Alliance: It covers a variety of flexible cooperative

arrangement between organizations, from fluid short term cooperation to

long term formal agreements. In strategic alliance partners remain

independent even after forming the alliance, both share alliance

management and benefits and both contribute to the alliance on

continuing basis. 

Merger : A merger is when two companies come

together to form a single company. They combine their

respective resources. Sometimes there are losses of jobs,

but not all. Those decisions are specified in the merger

contract well in advance of the deal.

Joint Venture: is when two or more companies

make an agreement to do business in one specific area.

They can share the insurance, and liability costs and

produce higher profits. It is usually a short lived

collaboration.

Basic Difference

Selected Companies By The Group

‘MERGER’Described BY Joy Saha

Koushik Das

Tanmoy Saha

Presented ByJoy SahaSec-ARoll - 23 ‘MERGER

’

RELIANCE POWER : the company was incorporated in

January 1995 as Bhawana Power Private Limited and

changed its name to Reliance Delhi Power Private

Limited in February 1995.Its change its name to

Reliance E-Gen Private Limited in January

2004,Reliance Energy Generation Limited in March

2004 and to Reliance Power Limited in 2007.This

company was established to develop, construct, and

operate power project in domestic and international

market.

Reliance Natural Resource Limited (RNRL): RNRL is an

Indian energy company involved in sourcing supply and

transportation of gas coal and liquid fuels. The

company was incorporated on 24 march 2000and went

public on 25th July 2005.

Reasons for merger

Reliance power will retain the assets and people of

RNRL

To increase revenue.

To increase market share.

How they make merger

RNRL merged with reliance power in more than

50000cr. to the stock deal.

BOD of both the companies exchange ratio of

one equity share of reliance power for every four

share of RNRL.

Benefits

This merger accelerates the implementation of Reliance power plants for creating more than 8000 MW gas based power generation capacity.

Because of merger Anil Dhiruvai Ambani Group’s (ADAG) net worth going to 64000cr, cash flow of Rs.13000cr and net profit of 8400cr. Reliance Power and its share holders including Reliance infrastructure limited will drive substantial benefit by this merger.

It envisages reliability and cost efficiency for fuel supplies through RNRL’s coal supply logistics and shipping business.

RNRL net worth of 1900cr leading to an increase in Reliance Power net worth to more than 16000cr & a significant further enhancement of the Reliance Power’s overall growth prospects.

Some disadvantages of this merger can be

Job loss of some of the workers because of corporate re-structuring and making the merged entity a lean organization. This may lead some sorts of fear and eventually decline the morale and motivation of the workers and can incorporate fear factor.

The ratio that was approved by the board of directors as swap ratio may not be appropriate for every section of the ordinary shareholders.

******

+_

Presented By……… Koushik Das Sec – A Roll - 26

Tech Mahindra serves telecom service providers , equipment manufactures &

software system. Tech Mahindra is leading particular IT skill and expertise enable clients to maximize returns on their IT

investment.

Satyam is a Information Technology Software Development Services, Systems Integration, Product Development, Electronic Commerce and Consulting. The company also offers Network enabled services

and online information services.

Mahindra satyam is a leading global business and information technology services company .The company professionals excel in enterprise solution

& client relationship management.

Key highlight of the merger

The merger of tech Mahindra & Mahindra Satyam (Saytam computer service) is largely seen as a positive deal by

analysis considering that the combined entity will become sixth largest software services provider and will have a balanced

revenue mix as it would client concentration.

The exchange ratio recommended by the values & approved by both the bonds is 2 share of tech Mahindra(face value of RS.10 each)for every 17 share of Mahindra Satyam (face value of Rs2

each)

The swap ratio for the merger is decided at two shares of Tech Mahindra for seventeen shares of Mahindra Satyam.

The main benefit in this merger will half propel the combined

entity in to top tier of Indian software & services companies.

Another good thing that will benefit Tech Mahindra is that at

least the interests of both the companies will be aligned, team is

one and they can think of creating much bigger company. They

will have about 17,000cr of market cap, making it the 5th largest

company. I am sure they will be targeting to enter the top 3

bracket.

Benefits of

Factors which could impact the industry

Increase business/sales activities by

understanding your competitors’

businesses better

Recognize potential partnerships and

suppliers

Obtain yearly profitability figures

………………..

Presented By Tanmoy Saha Sec – C Roll-58

Maruti Suzuki India Limited is a subsidiary of Suzuki

Motor Corporation of Japan. Maruti Suzuki is a leading

manufacturer of passenger vehicles in India. Lovingly

referred to as the people's car maker; over the past

three decades Maruti Suzuki has changed the way

people in India commute and travel.

Suzuki Powertrain India Ltd

Suzuki Powertrain India Limited is a joint venture

of Maruti Suzuki with Suzuki Motor Corporation,

Japan at Manesar. It manufactures world class

diesel engines and transmissions for cars. This

diesel engine plant has a capacity to manufacture

300,000 diesel engines a year.

In a move that will bring all diesel engine

manufacturing facilities of Maruti Suzuki India Ltd

(MSIL) under a single management, the country’s

largest auto maker on approved a proposal to merge

group unit Suzuki Powertrain India Ltd with itself.

Market Scenario

Benefits……

*After the merger, Japan’s Suzuki Motor Corp’s stake in

MSIL will go up to 56.2 per cent from the current 54.2 per

cent. The merger will be effected through a share swap. 

* MSIL will be able to bring its entire diesel engine

capacity under a single management control.

Clashes of culture between different types of businesses can occur, reducing the effectiveness of the integration. 

May need to make some workers redundant, especially at management levels - this may have an effect on motivation.

May be a conflict of objectives between different businesses, meaning decisions are more difficult to make and causing disruption in the running of the business.

>>>>*<<<

Disadvantages……

Described ByChiranjeet Bardhan

Rajat Pal

Partha Bhowmik

‘JOINT VENTURE’

Presented By……………Chiranjit BardhanSec – CRoll - 10

Sony company founded in 7 may 1946, it is a Japanese company.

One of the leading manufacturers of electronics, video, communications, gaming

consoles and information technology products for the consumer and professional markets,

which developed the company into one of the world's richest companies.

It ranked 87th on the 2012 list of Fortune global.

Ericsson company founded in 1876 as a telegraph equipment repair shop, it was incorporated on August 18, 1918.

Today, Ericsson is a leading provider of communications equipment and related professional services and multimedia solutions to operators of mobile and fixed networks worldwide. 

Like most of the telecommunications industry, LM Ericsson suffered heavy losses after the telecommunications crash in the year 2000.

Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones.

Sony was having 47% of market share and ericsson was having 53% while starting their joint venture.

Reasons for forming a Joint Venture

Internal reasons Strategic Goal

Build on company's strengths Synergies

Spreading costs and risks Transfer of technology

Improving access to financial resources Diversification

Economies of scale and advantages of size

Access to new technologies and customers

Access to newer managerial practices

Competitive goals

Influencing structural evolution of the industry

Pre-empting competition

Defensive response to blurring industry boundaries

Creation of stronger competitive units

Speed to market

Improved agility

Benefits and Opportunities Of

Existing Knowledge of Target Market which is

consumers in the age group of 15-40.

Creation & Innovation of Fantastic Products

Most attractive & innovative Global Brand

Untapped Markets- such as Rural markets

More Demand for luxury products from high end

user

Disadvantages and Threats of

Low effective Distribution Channels.

Less importance given to Promotional activities.

Competition from other small players in the

market such as Nokia, Samsung, Motorola etc.

Entry of new competitors.

Change in technology such as introduction of

‘iPhone’ by Apple

-------------

PRESENTED BY- RAJAT PAL SECTION-A Roll-No:41

MARKET SITUATION

Before 1980 Indian government did not allow foreign

companies to enter into domestic market. Because it

could give a tough competition to the Indian companies.

But after 1980 Indian Government started allow the

foreign companies to do business in Indian market

through joint ventures.

HERO is a basically cycle manufacturer company. It was established in 1956 in

Ludhiana, Punjab.

HERO is the largest by-cycle manufacturer in the world. It manufactures over 16000 bicycles

in a day.

HONDA Motor company was established in the month of

September on 1948. It is a Japanese company. The total

capital of HONDA is ¥86 billion(March 31,2012).

Why HONDA had selected HERO

Because of the following reason HONDA selected HERO for the joint venture-

*HERO had a large and very good distribution channel.

*HERO had a very good and reliable image.

*HERO was experienced in handling large volume of production.

ABOUT THE CONTRACT

*HONDA and HERO enter into the contract for joint venture in june,1984 and formed a new company named HERO HONDA.

*According to the contract HONDA will provide technical facilities with research and development.

*HONDA agreed to give $ 500,000 and royalty in SP.

*Both HERO & HONDA held 26% equity with other 26% are sold to the public and rest of the shares are sold to the financial institutions.

HERO HONDA had grown continuously and became the largest two-wheeler manufacturer company in the world with annual sales volume over2 million motorcycles.

•HEROHONDA had 5000 outlets.•HEROHONDA Splendor was the largest selling motorcycle brand.

Reasons for success

Reliability on HERO.

Better fuel efficiency.

Comparatively low price.

Individual dignity and teamwork.

Absence of major competitors in the market

initially.

FAILURE OF THE JOINT VENTURE

After the successful partnership of 26 years they broke up. HONDA sold their 26% shares to HERO Group and after that it has become HERO MOTOCORP.

REASONSa)Companies preferred the freedom of making their own decisions.b)Higher royality for HONDA. It was increased to 2-3 % of sales and it would grow up to 8%.

CONCLUSION As a result of joint venture between HERO and

HONDA both the company has gained capacity and

expertise. It helped HERO to enter in the

automobile sector and to gain technology. And in

case of HONDA they have got chance the chance to

enter and establish their brand name in the Indian

market.

Due to the different culture and management

styles result in poor integration and co-operation.

Presented by.

Partha Bhowmik Sec – C Roll – 36

Bharti Enterprises

Sunil Bharti MittalChairman and Managing Director of Bharti Group

Bharti Enterprises is one of India’s leading business groups with interests in telecom, agri-business, financial services

and retail.

Bharti Airtel Bharti Teletech Telecom Seychelles Comviva Technologies Ltd Field Fresh Foods Pvt. Ltd Bharti Retail Bharti AXA General

Insurance Bharti AXA Life Insurance Bharti AXA Investment

Managers Centum Learning Limited Jersey Airtel Guernsey Airtel Bharti Foundation Bharti Realty Bharti Infratel

AXA S.A. is a French global insurance group headquartered in the 8th arrondissement of Paris.

The AXA group of companies engage in life, health and other forms of insurance, as well as investment management. The group operates primarily in Western Europe, North America, the Asia Pacific region, and the Middle East.

The AXA Group encompasses five operating business segments: Life & Savings, Property & Casualty, International Insurance (including reinsurance), Asset Management and Other Financial Services. It ranks as the 9th largest company in the world (based on revenue) on the 2010 Fortune Global

Life Insurance company

Bharti AXA Life Insurance is a joint venture between Bharti, one of India’s leading business groups with interests in telecom, agriculture business & retail, and AXA, world leader in financial protection and

wealth management.

The joint venture company has a 74% stake from Bharti and 26% stake of AXA.

Bharti AXA Life Insurance Company Limited started operations in Dec. 2006

Bharti AXA Life is one of the newest and fastest growing life insurance companies in the country.

Bharti

A trusted brand name

All India presence

Largest in the telecom

industry

Strong financial base

AXA

A trusted brand name

Global presence

Largest in the insurance

industry (in terms of revenue)

Strong financial base

Benefits & Opportunities for

Integrated approach to seek innovative solutions

Policies for various age and economic groups

International expertise of AXA group

Strong Marketing Campaign

The joint venture has a 74% stake from Bharti and 26%

stake from AXA Asia Pacific Holdings Ltd

Bharti enterprise serves over 110 million customers

Growing rural market

Earning Urban Youth

Disadvantages & Threats for

Less penetration in rural India

Small agent base

Insurance companies have a poor image

when it comes to payment of dues Entry of new NBFCs in the sector

*****

Strategic Alliance

Presented by

Gaurav Chettri

STRATEGIC ALLIANCE

Presented by Gaurav Chettri Sec – A Roll - 19

Nokia is one of the world’s biggest manufacturers of mobile phone. Nokia was born in 1895.The company

got its name from the river Nokianvirta. In 1990 Nokia started making military and marketable mobile radio communications. Together with Salora Oy, Nokia

created the first VHF radio in 1964. In 1992 Nokia first introduced, the Nokia 1011,its first GSM handset.

Two years later the company first introduced their Nokia tune.Nokia’s first 3G phone, the Nokia 6650

was launched in 2002.

Microsoft Corporation is an American multinational

corporation headquartered in Redmond, Washington.

The company was founded by Bill Gates and Paul Allen

on April 4 1975.Microsoft is the world’s largest most

valuable companies. Microsoft was establish to develop

and sell BASIC interpreters for the Altair 8800.It rose

to dominate the personal computer operating system

market with MS-DOS in the mid 1980s.

Nokia and Microsoft plan a "third ecosystem," an alliance that touches all parts of the mobile phone business.

Microsoft and Nokia announced a broad mobile phone partnership today that joins two powerful but lagging

companies into mutually reliant allies in the mobile phone market.

As expected, Nokia plans to use Microsoft's Windows Phone 7 operating system as part of a plan to recover from competitive

failings detailed in Nokia Chief Executive Stephen Elop's "burning platform" memo.

But it's deeper than just an agreement to install the OS on Nokia's phones. Instead, the companies call it an attempt to

build a "third ecosystem, acknowledging that competing with Apple's i-OS and Google's Android involves a partnership that

must encompass phones, developers, mobile services, partnerships with carriers, and app stores to distribute

software.

REASONS FOR STRATEGIC ALLIANCE

* .Great Usability- Microsoft tiles are even more simpler to set up and

use and they put the information that’s most needed by users right

where you need it.

* .Office- Dealing with proper work documents on a mobile device has

always been the source of a lot of pain for users.

* .Media Center-Windows Phone does a great job of bringing together

your media in an attractive and user friendly way.

*Mobile Mail-Windows mobile are providing MS as your mobile device

operating system. Many peoples are dependent on connecting to a

Microsoft Exchange Server, etc.

There are many specific advantages of a

global strategic alliance like

Gain new skills and technology.

Develop new products at a profit.

Share fixed costs and resources.

Enlarge your distribution channels.

Broaden your business and political contact base.

Gain greater knowledge of international customs and

culture.

Enhance your image in the world marketplace.

Disadvantages of the Global Strategic AllianceLike,

Weaker management involvement or less equity

stake.

Fear of market insulation due to local partner's

presence.

Less efficient communication.

Poor resource allocation.

Difficult to keep objectives on target over time.

Loss of control over such important issues as product

quality, operating costs, employees, etc.