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INTRODUCTION
Profitable growth constitutes one of the prime objectives of most business firms. It can be achieved ?internally', either through the process of introducing/developing new products or by expanding the capacity of existing products the firm is engaged in. Alternatively, growth can be facilitated ?externally' by mergers and acquisitions of existing business firms.
Internal expansion enables a firm to retain control with itself and also provides flexibility in choosing equipment, technology, location etc., which are compatible with existing operations. However, internal expansion usually involves a longer period of implementation and greater uncertainties, and sometimes, raising adequate funds is problematic. A merger or an acquisition obviates, in most of the situations, finance problems as payments are normally made in the form of shares of purchasing company. Further, it also expedites growth, because the merged/ acquired company already has the products or facilities that are required.
Merger-mania has struck Wall Street. Nearly every sector of the world economy has been affected by the recent wave of mega-mergers, which have included NATIONS BANK, BANK OF AMERICA, BOEING, McDONNEL-DOUGLAS, AOL, TIME WARNER, EXXON and MOBIL to name a few. Last year alone, mergers involving American companies totaled a record of $1 trillion. In India, in 1999, there were nearly 12,000-crore-rupees-worth of mergers and acquisitions.
MERGERS, ACQUISITIONS AND TAKEOVERS
Some inefficient companies keep afloat because of management obstinacy where as some simply by default. One method of weeding them out is to get them liquidated, but in many cases that also implies wastage or destruction of valuable as ...