{"id":2712,"date":"2021-02-25T06:32:05","date_gmt":"2021-02-25T06:32:05","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=2712"},"modified":"2021-02-25T07:10:15","modified_gmt":"2021-02-25T07:10:15","slug":"difference-between-mergers-and-acquisitions","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/difference-between-mergers-and-acquisitions\/","title":{"rendered":"Difference between Mergers and Acquisitions in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In India, Merger and Acquisition are the two most frequently applied corporate reformation strategies, often expressed in the same sniff, but they are not the same. Both Merger and Acquisitions refer to joining two different companies, but there is some key difference between Mergers and Acquisitions involved in using them. It helps the business in maximizing growth and profit by increasing the production level and marketing process. A merger means a combination of two separate entities to create a new joint organization. Whereas, an acquisition means the takeover of one company or entity by another. Scroll down to check the definition and difference between mergers and acquisitions in India.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3aa753934f4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3aa753934f4\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/difference-between-mergers-and-acquisitions\/#Meaning_of_Merger\" title=\"Meaning of Merger\">Meaning of Merger<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/difference-between-mergers-and-acquisitions\/#Meaning_of_Acquisition\" title=\"Meaning of Acquisition\">Meaning of Acquisition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/difference-between-mergers-and-acquisitions\/#Comparison_Table_between_Mergers_and_Acquisitions_in_India\" title=\"Comparison Table between Mergers and Acquisitions in India\">Comparison Table between Mergers and Acquisitions in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/difference-between-mergers-and-acquisitions\/#What_is_the_Key_Difference_between_Mergers_and_Acquisitions\" title=\"What is the Key Difference between Mergers and Acquisitions?\">What is the Key Difference between Mergers and Acquisitions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/difference-between-mergers-and-acquisitions\/#Benefits_of_Mergers_and_Acquisitions_in_India\" title=\"Benefits of Mergers and Acquisitions in India\">Benefits of Mergers and Acquisitions in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/difference-between-mergers-and-acquisitions\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Merger\"><\/span>Meaning of Merger<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Merger\nstates the mutual alliance of two or more companies to form a new one with a\nnew name. In a merger, different companies of the same size agree to mix their\noperations into a single company, where ownership, profit, and control of the\ncompany is shared. For example, if an X Ltd. And Y Ltd. Company combine\ntogether to form a new company Z Ltd.<\/p>\n\n\n\n<p>The\nprimary reason behind choosing the Merger by several companies is to unite the\nweakness, strength, resources, a profit of the merging companies, and eliminate\ntrade obstructions, reduce competition, and gain interaction. The members of\nthe old companies become the member of the new one. There are five different\ntypes of Merger, and you can check the same below:<\/p>\n\n\n\n<ul><li><strong><em>Vertical Merger:<\/em><\/strong> Merging with customers or suppliers.<\/li><li><strong><em>Horizontal Merger:<\/em><\/strong> Merging with competitors.<\/li><li><strong><em>Conglomerate Merger:<\/em><\/strong> It means merging with a company that deals with distinct business activities.<\/li><li><strong><em>Market Extension Merger:<\/em><\/strong> It means merging with a company that deals with similar products but operates in a different market.<\/li><li><strong><em>Product Extension Merger:<\/em><\/strong> Merging a company with another company that deals with products that are operating and similar in the same market.<\/li><\/ul>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/swaritadvisors.com\/blog\/benefits-of-mergers-and-acquisitions\/\">What are the Benefits of Mergers and Acquisitions?<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Acquisition\"><\/span>Meaning of Acquisition<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Acquisition\nmeans purchasing a company&#8217;s business by another company. This can be completed\nby purchasing the company&#8217;s assets or buying ownership over 51% of its paid-up\nshare capital. In Acquisition, the firm which purchases another firm is called\nas acquiring company while the company which is being acquired is called Target\nCompany. The purchasing company is more dominant in terms of structure, size,\nand operations which takeover the weaker company or target company. Most of the\ncompanies in India uses this acquisition strategy for gaining immediate growth,\nspreading their operation area, profitability, market share, etc.&nbsp; There are three different types of Acquisition,\nand you can check the same below:<\/p>\n\n\n\n<ul><li><strong><em>Hostile Takeover:<\/em><\/strong>\nThe purchasing company takes over a company by gaining to company\u2019s\nshareholders.<\/li><li><strong><em>Friendly Takeover:<\/em><\/strong>\nThe purchasing company takes over a company by discussing terms with its\nmanagement.<\/li><li><strong><em>Buyout Takeover: <\/em><\/strong>The\npurchasing company takes over a company by purchasing more than 50% of the\ncompany.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Comparison_Table_between_Mergers_and_Acquisitions_in_India\"><\/span>Comparison Table between Mergers and Acquisitions in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Comparison<\/strong>\n  <\/td><td>\n  <strong>Merger<\/strong>\n  <\/td><td>\n  <strong>Acquisition<\/strong>\n  <\/td><\/tr><tr><td>\n  Definition\n  <\/td><td>   It means the combinations of two or more companies to form a new company.   <\/td><td>   Acquisition means when one company purchases the business of another company.   <\/td><\/tr><tr><td>\n  Purpose\n  <\/td><td>   The purpose of the Merger is to decrease the competition level and increase the efficiency of operations.   <\/td><td>\n  The primary purpose of\n  Acquisition is for sudden growth.\n  <\/td><\/tr><tr><td>\n  Legal Formalities\n  <\/td><td>   The Merger requires more legal formalities.   <\/td><td>   The Acquisition requires less legal formalities.   <\/td><\/tr><tr><td>\n  New Company Formation\n  <\/td><td>   In a Merger, a new company is formed by combining two different companies.   <\/td><td>   In Acquisition, there is no formation of a new company.   <\/td><\/tr><tr><td>\n  Decision Nature\n  <\/td><td>   The common decision of the companies going through mergers.   <\/td><td>   The friendly decision of attaining and attained companies.   <\/td><\/tr><tr><td>\n  Business Size\n  <\/td><td>   The size of merging companies is less or more the same.   <\/td><td>   The acquiring company\u2019s size is more than the acquired company\u2019s size.   <\/td><\/tr><tr><td>\n  Minimum number of companies\n  involved\n  <\/td><td>   In the Merger, there is a minimum of three companies involved.   <\/td><td>\n  Whereas in acquisitions,\n  there is a minimum of two companies involved.\n  <\/td><\/tr><tr><td>\n  Example\n  <\/td><td>   The formation of GlaxoSmithKline is done by the merging of Glaxo Wellcome and SmithKline Beecham.   <\/td><td>\n  Tata Motors purchasing Jaguar\n  Range Rover.\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Key_Difference_between_Mergers_and_Acquisitions\"><\/span>What is the Key Difference between Mergers and Acquisitions?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>All\nthe points mentioned below explain the key difference between Mergers and\nAcquisitions in a detailed way:<\/em><\/strong><\/p>\n\n\n\n<ul><li>A company strategy in which two different companies join together to form a new company is known as a Merger. Whereas, a company strategy in which a company buys another company and take over all the controls over it, is known as Acquisition.<\/li><li>In a Merger, two different companies combine to form a new one whereas, in Acquisition, two companies don&#8217;t lose their existence.<\/li><li>If two different companies are the same in size and nature, then it goes for the Merger. Whereas, in the Acquisition, the bigger company conquers the smaller company.<\/li><li>The Merger is done willingly by different companies, whereas the Acquisition is made either willingly or unwillingly.<\/li><li>There are more legal formalities in a merger than Acquisition. <\/li><li>In a merger, a minimum of three companies is involved, whereas, in the Acquisition, a minimum of two companies are involved.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_Mergers_and_Acquisitions_in_India\"><\/span>Benefits of Mergers and Acquisitions in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The benefits of Merger and Acquisitions in India are as follow:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Infographic-for-Swarit-Blog-2.png\" alt=\"Benefits of Mergers and Acquisitions\" class=\"wp-image-2714\" width=\"362\" height=\"360\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Infographic-for-Swarit-Blog-2.png 757w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Infographic-for-Swarit-Blog-2-150x150.png 150w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Infographic-for-Swarit-Blog-2-300x298.png 300w\" sizes=\"(max-width: 362px) 100vw, 362px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong><em>Tax Benefits: <\/em><\/strong>It\nalso offers various tax benefits to the involved companies. One company&#8217;s\nlosses are set off against the profits made by another company in that way,\ndecreasing the tax liability.<\/li><li><strong><em>Increased Size:<\/em><\/strong>\nThe process of Mergers and Acquisitions supports companies by increasing their\nnet revenue and operations, which may take many years otherwise. Furthermore,\nthese planned tools help in encouraging the share price of the company.<\/li><li><strong><em>Decreased Competition:<\/em><\/strong>\nThe merged reserves and capital of the newly created company and helped it in\ndecreasing competition and gaining a competitive power.<\/li><li><strong><em>Makes a New market: <\/em><\/strong>With\nthe help of M&amp;A, two different companies are working together, it provides\nbetter sales predictions. Apart from this, Mergers and Acquisitions also helps\nin increasing the market reach of the business.<\/li><li><strong><em>Increased Power:<\/em><\/strong>\nThe combination of two or more different companies is very strong enough to\nlead other market companies, ensure better performances, financial gains, etc.\nSimply, it attracts more and more customers.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Due to strong competition, only a few mergers can be seen, but Acquisition is getting popular day by day. From the above-mentioned difference between Mergers and Acquisitions, it is cleared that both of them are gaining the benefits of taxation, increasing competition, financial benefits, and so on, which can be beneficial. Sometimes, the hostile effect can also be seen, such as increasing turnover of the employee, clashing the organization&#8217;s culture and others but all these effects rarely happen.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/swaritadvisors.com\/learning\/cross-border-mergers-and-acquisitions-in-india\/\">Cross Border Mergers and Acquisitions in India: A Complete Guide<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In India, Merger and Acquisition are the two most frequently applied corporate reformation strategies, often expressed in the same sniff, but they are not the same. Both Merger and Acquisitions refer to joining two different companies, but there is some key difference between Mergers and Acquisitions involved in using them. It helps the business in [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":2713,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[68,64],"tags":[425],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2712"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=2712"}],"version-history":[{"count":8,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2712\/revisions"}],"predecessor-version":[{"id":2736,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2712\/revisions\/2736"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/2713"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=2712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=2712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=2712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}