Merging & Acquisition

Nowadays is very common to listen about Merging and Acquisition, but how it works? Is that as easy as we think? What a company should do to use each type of "Model"? I’m going to try to explain and make this easier for all of us.

An Acquisition is when a company takes over another and established itself, as the new and unique owner is normally friendly if is received from the employees, directors of the other company as an opportunity to grow and to learn of others, but it can be hostile if it is received as something bad.

Some Types of acquisitions can be:
- Reverses take over: the acquisition of a public company from a private company.
- Reverse Merger: is when a private company can be in the stock market for a few period of time.

Merger instead can be understood as two companies that agree to go forward as a new company and have a bigger and new power.

Types of Mergers

- Horizontal Mergers: When two firms that are rivals decide to consolidate their business.
- Vertical Mergers: The union between companies that have potential buyers and sellers.
- Conglomerate Mergers: Companies should share marketing and distribution channels and sometimes production process.
- Co generic Mergers: This happen when two companies are in the same industry but they have no mutual buyers and customers.

Also if your are thinking to make a M&A you should take into account the business evaluation that is integrated by

-Asset valuation,
-Historical earnings valuation,
-Future maintainable earnings valuation,
-Relative valuation
-Discounted cash flow





An Example for us to understand this, can be the Acquisition take by an Indian Company Komli Media to Acquire UK’s Indoor Media

Komli Media has made two Acquisitions since June of this Year, according to Prashant Mehta chief operating officer of Komli Media“A lot of businesses are looking to focus on the non resident Indian and there is a lot of potential to grow this business from here,”.

They are trying to increase their market not only in Asia but also in other Continents, that’s why they are seeing with good eyes the idea of acquiring new companies that already develop and are working, because this can gave them an idea and a knowledge of how to work in a different country.

Also we take into account that UK represented the largest population of non resident Indians, a reason that make us feel more secure to get into this market, acquired the company and start working with and for our community.


The size of the agreement is not known but we can said that is a big one taking into account the size of each company and that the sources that the company have, has been used to make this agreement real.


THE NEXT GOOGLE?









Bibliography

Example:
Gouri Shah
Fri, Oct 8 2010. 12:30 AM , Online: http://www.livemint.com/2010/10/06211640/Komli-Media-acquires-UK8217.html

Text
http://wiki.answers.com/Q/What_are_the_three_types_of_mergers
http://www.investopedia.com/university/mergers/mergers1.asp


Video
zeketoc | 27 de julio de 2009
http://www.youtube.com/watch?v=0CbLIUCdVvI

image
http://images.businessweek.com/ss/09/06/0615_50_startups_need_to_know/20.htm
http://www.cartoonstock.com/directory/m/mergers__acquisitions_gifts.asp