Definition of 'Mergers And Acquisitions - M&A'

A general term used to refer to the consolidation of

companies. A
merger is a combination of two companies to form a new
company,
while an acquisition is the purchase of one company by
another in
which no new company is formed.

Merger with Consolidation

Compa
ny
A

Compa
ny
B

Compa
ny
C

Acquisition

Company
X

Compa
ny
X
Compa
ny
Y

Example of a merger : AMR and U.S. Airways

November
2012

July 2012
U.S. Airways
proposes
merger to
bankrupt AMR.

April 2012

AMR creditors
encourage AMR to
merge with another
airline, instead of
emerging from
bankruptcy alone.

AMR and U.S.

Airways begin
merger
discussions.

U.S. Airways proposes

merger, with its
shareholders owning 30%
of the new company.

Details of the
merger are
worked out.
Merger filed
with the FTC
under HartScott-Rodino
Act.

September
2012
February
2013

Telecom Say New M&A Rules

consolidation
Dampener
M&A rules set to ne announced for the telecom industry are likely to disappoint phone

companies because the govt has refused to concede the demand that they shouldnt
be required to pay market-linked prices for spectrum that comes with any acquisition .
The last draft has also broadened market share rules to include annual revenue.

Companies say this amount to having to pay twice over for airwaves and that it will
discourage any attempt at consolidation. The sector is just emerging from a bruising
price war aimed cutthroat competition, but still has about 10 to 12 players in some of
the countrys 22 circles.
There cant be consolidation that reduces competitiveness in a sector, said Rajan
Mathews, director general of the Cellular Operators Association of India (COAI) that
represent GSM operators.
Some of the guidelines are relatively reasonable, such that there at least four to five
operators. The govt wants to ensure that the India market remains a competitive one.
We will have to wait to see to what degree consolidation happens, since it is allowed
on a circle to circle basis.

BHARTI TO BYE LOOP MOBILE FOR

RS.700 CROCE
Bharti Airtel is set of acquire Loop Mobile in a Rs.700-crore deal that may be
announced as early as this week in what will be the first consolidation move in the
countrys telecom industry since 2008, taking Indias biggest operator to the top
spot in Mumbai, three people involved in the deal told ET.
The deal will be via a slump sale, in which one or more undertakings are
transferred for lump sum, without values being assigned to individual assets and
liabilities, the three people said. Kotak Mahindra Investment Bank is the sold
advisor for the transaction, running the sale process, they said. There is no banker
involved on behalf of Bharti Airtel.
After the acquisition, Bharti Airtel will have more than 7.1 million users in Mumbai,
pushing Vodafone India, which had over 6.9 million users at the end of November,
to the second spot in the city. Mumbai and delhi are the two most lucrative
markets for premium data service in the country, and also have the highest
revenue-generating customers. Bharti Airtel is already the leader in delhi. The deal
will be the first since Idea Cellular picked up a majority stake in since in 2008.

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