Question

Single-page assignment on difference between merger and acquisition. Also two to three famous Mergers and Acquisitions in Middle East . Lastly, two famous hostile takeovers in the world.

Answer 1

MERGER refers to consolidation of two or more companies to form an all new entity with a new name. Merger assists the companies in uniting their strengths, resources and weaknesses. Merger leads to reduction in trade barriers and competition.

Types of merger-horizantal, vertical, congeneric, conglomerate.

ACQUISITION is a purchase of an entity by another entity. This can be done either by acquiring ownership over 51% of its share capital or by taking over the assets of the company. The acquiring company is more influential in terms of structure, operations and size as compared to target company.

Types of acquisition -Hostile, friendly, buyout.

Saudi International Petrochemical Company agreed to acquire Sahara Petrochemical Company in an all-share deal valued around $2 billion. In 2017, Qatar proceeded with the merger of Qatar Vinyl Company and Qatar Petrochemical Company. This merger was pushed through by Qatar Petroleum, the state-owned petroleum company of Qatar.

One of the most famous hostile takeover attempts took place in 1983, when London-based industrialist Swaraj Paul sought to control the management of two Indian companies -- Escorts Limited and Delhi Cloth Mills (DCM) Limited -- by picking up their shares from the stock market.

Another one is AOL and Time Warner, $164bn, 2000-When AOL announced it was taking over the much larger and successful Time Warner, it was hailed the deal of the millennium. But the dotcom boom meant the new AOL Time Warner lost over $200bn in value in less than two years.