Mergers and acquisitions are powerful strategies that can transform businesses and drive growth in an increasingly competitive global market. As companies continue to seek ways to enhance their operations and market position, M&A will remain a prominent aspect of corporate strategy. The M&A field also offers a diverse range of career opportunities for professionals with various skill sets and backgrounds.
As businesses increasingly look to M&A as a strategy for growth, the demand for skilled professionals in this area continues to rise. Business is one of the oldest professions practiced in the world. With the passage of time the way of doing business has been changed a lot. Nowadays merger and acquisition are very common phenomenon. These proves to be a great opportunity to expand business worldwide.
Professional Opportunities in M&A field
CAs play a vital role in evaluating deal valuation, due diligence and post-merger integration. The M&A field offers a diverse range of career opportunities for professionals with various skill sets and backgrounds. Some of the key professional opportunities within the M&A field are as below:
1. Investment Banking Analyst
- Role: Support the execution of M&A transactions, conduct financial modeling, and prepare pitch books.
- Skills Required: Strong analytical skills, proficiency in financial modeling, and knowledge of valuation techniques
2. M&A Associate
- Role: Work closely with senior bankers to manage deal execution, perform due diligence, and interact with clients.
- Skills Required: Excellent communication and negotiation skills, understanding of M&A processes, and project management abilities
3. Private Equity Professional
- Role: Evaluate investment opportunities, conduct due diligence, and manage portfolio companies post-acquisition.
- Skills Required: Strong financial analysis skills, deep understanding of business operations, and experience in deal sourcing
Few key provisions of the Takeover Regulations are:
Open offer
An acquirer must make an open offer to shareholders if they acquire shares or voting rights that exceed certain thresholds. A mandatory open offer is triggered if an acquirer exceeds 25% voting rights or increases their stake by more than 5% in a financial year. Special conditions apply for companies on the Innovators Growth Platform, raising the threshold to 49%.
Offer price
The offer price must be not lower than the price determined in accordance with the Takeover Regulations. The acquirer can increase the offer price up to three working days before the offer opens.
Escrow account
The acquirer must set up an escrow account for 25% of the consideration if the offer is less than ₹500 crores, and 10% for the excess
Withdrawal
An offer can only be withdrawn if:
- Statutory approval is refused
- The sole acquirer dies
- A condition in the acquisition agreement is not met
- SEBI deems it necessary in special circumstances
Obligations of Company
The target company’s board must conduct business as usual during the offer period and cannot make significant changes without shareholder approval. The target company’s board must not engage in significant transactions outside ordinary business without special resolution approval.
Cross Border Mergers
A cross-border merger is a combination of two or more companies from different countries into a single entity. Thus, when an India Company merges with a foreign company it is known as cross boarder merger. Various companies acquire foreign companies in recent years to enter into global market. Doing business globally will undoubtedly improve the company potential for expansion and growth. By setting up a manufacturing unit in other country where labor and other production cost are cheaper than the home country will help in lowering cost of production. Hence proves to be fruitful for the company.
Benefits of Cross Border Mergers & Acquisitions
- Expansion of markets
- Revenue generation
- Geographic and business diversification
- Technology transformation
- Potential employees
- Lower cost of production
- Exposure to new culture
- Avoiding access obstacles & Industry consolidation
- Tax planning and benefits
- Increasing Goodwill
- Increased customers base & Competitive gain
- Capital accumulation
- Sharing of management skills
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