Merger and Acquisition

Survival and development of companies in the present competitive world requires adoption of strategies for promoting their competitive situation. In such condition, a most basic strategy is making decision concerning merger and acquisition. Such decisions have to be made strategically, intelligently and skillfully by financial managers and other senior managers of companies. These decisions affect an organization’s long-term destiny and in case all aspects of the same are failed to be studied comprehensively and in an integrative manner, it might seriously endanger the strategic interests of both organizations. Optimal merger and acquisition services include the services required for purchase, sale, merger and spinoff of companies, in such a manner that it may optimize and accelerate the growth trend of the company and create value for both acquiring company and the acquired company.

Reasons of Merger and Purchase

1)  To get access to more customers, as well as higher cash flow؛

2)  To take advantage of new technologies and organizational capabilities؛

3)  To boost income and also increase in the share price؛

4)  To scale up profit and combined effort؛

5)  To prevent the rivals’ development؛

6)  To get access to new resources and achieve integration into supply chain system (vertical)؛

Types of Mergers

In respect of Production Chain

-  Horizontal Merger: Two companies produce similar products in a certain industry; in other words, two companies are directly competing with each other and have similar product line and market.

- Vertical Merger: Where two companies produce various parts of a product and they are in the production chain of a product.

In respect of Finance

- Purchase Merger: A situation in which a company purchases another company in cash or by publishing debt instruments.

- Consolidation Merger: A situation in which a company is formed with a new trade mark and both merged companies are founded under such new company.

- Reverse Merger:  A situation in which a private joint stock company buys most of the shares in a public joint stock company so that it controls that company and becomes a public company itself without incurring the cost and spending the time required for an initial public offering.

In respect of Marketing Strategy

- Market Extension Merger: Merger of two companies which separately sell similar products.

- Product Extension Merger: Merger of two companies which sell two different, but related, products in a market.

- Conglomeration: Merger of two companies which have no common business field with each other, i.e., they are active in two different industries.

- Congeneric/ Concentric Merger: Merger of two companies of similar industries, but they have different buyers, customer and suppliers, like merger of a bank and a leasing company.

Services

Supported by knowledge and operational knowledge of our experienced specialists, and upon consideration of all aspects, our Company provides comprehensive services in process of merger and acquisition for both the buyer and seller. Such services include consultation concerning strategic decisions in respect of merger, acquisition spinoff and defensive measures against merger and acquisition.

We also offer some other consultation services as follows:

1)  To provide fair analytic reports concerning interests and losses due to merger and acquisition.

2) To take into consideration of all aspects, such as business cycle of the relevant organization and industry, supply chain and many other cases.

3) To carry out analysis on the financial statements by taking into consideration of the effects of transaction and assessment of its potential financial and operational risks.

4)  To do valuation and propose appropriate and fair prices and follow up and do other required cases.

5)  To frequently hold discussions with relevant parties and institutions.

6)  To provide re-structuring services after merger, acquisition and spinoff processes.