.png)
INTRODUCTIONThe idea innovation expands and enhances the business opportunities and strengthens the market. That increases the competition among business entities. For the purpose of surviving, new pattern of merger and acquisition came into picture which nowadays becomes very prevalent in India. The Company Act 2013 governs the methods and procedure of merger and acquisition and provides the particular framework to facilitate the same. Merger and acquisition helps the companies to grow rapidly. In last decade, we have been witnessing that few leading companies are in front of the race of this culture of merger and acquisition. So, to combat and fit into the competitive market, companies are going into merger or acquisition to establish and expand its consumer base in this boundary less global market.
WHAT IS MERGERS AND ACQUISITIONSWhile two words, merger and acquisition words are used interchangeably in the general sense of the English word but in the legal language they have completely different meaning.
Merger is “ the absorption of an estate, a contract, or an interest in another, of a minor offence in greater, or of a cause of action into judgement. In merger, two companies combine with each other and create a new legal entity in the different name and in that legal entity they carry on the business in further[1].
Acquisition is “the act of acquiring something”[2]
The basic difference between a merger and an acquisition is that in merger, companies merge with each other and create a new legal entity, whereas in an acquisition, one company is taken over by another entity. In an acquisition, no new entity gets emerged, acquiring company starts managing all of the operational management decision of the company. This is the major difference between two regarding all operations and management decisions of an acquired company are taken by the acquiring company.
RELIANCE AND ADANI GROUP BECOMING GIANTSAfter independence, Tata and Birla emerged as two big business and Reliance and Adani groups are now added to this list. At present, Reliance Industries Ltd have at 8 major areas in which they operate- petroleum, natural gas, Petrochemical, textile, retail, telecommunication, media, television, entertainment, music and financial services software. Adani groups and family are rooted in the areas of Port management, Electric Power, Mining and Renewable Energy, Airport Operation, Oil & Gas, Food Processing and Infrastructure etc.
According to Forbes worlds billionaire list Adani groups and family Mukesh Ambani have been ranked at 4th and 10th position[3] respectively. Presently both the companies are on the path of merger and acquisition to diversify their businesses. During the Covids pandemic, in which around 1.7 lakh people lost their jobs Adani groups and Reliance were amongst the 100 Billionaires[4] amid pandemic. In the last few years we have been seeing a huge number of merger and acquisition. Recently Reliance industries Ltd has merged and acquired companies like Mandarian Oriental, Dunzo, NowFloats Technology, Fynd, Hamleys, Netmeds, Zivame, Urban Ladder, Jio Savan, Ritu Kumar, Partico, Manish Malhotra, Lithium Werks[5] etc. These merger and acquisition will enable both parties to reach their potential and carry business in more productive and profitable manner. Since 2014, Adani groups and family is driving the process of merger and acquisition in and with almost 30 companies[6]. They have been flourishing since last decade and in last two years it has become India’s second largest player through one mega acquisition of Ambuja Cements and its subsidiary ACC Ltd from Holcim’s assets, Ambuja Cement and ACC, for $10.5 billion[7]. This acquisition is landmark and striking step towards rich list. The mega deal of cement acquisition of Holcomb by Adani Groups and Family lifted the Indian Incorporation deal value to more than double value in May 2022. If we see last year deal value then it is found that the value was $7.965 billion[8]. There are several instances of companies, entering into merger proposals, to survive in the market. Acquisition by Adani groups and family and Reliance Industries Ltd is not limited to India but also across the world. Prior to 1991 economic reforms acquisition of foreign countries was arduous and complicated which is not the case in the recent times. Adani group’s acquisition of Holcim’s assets and Reliance Industries Ltd has acquisition of Mandarian Oriental Hotel show the economic and growth potential of the both these companies.
One by one both companies are acquiring and expanding with ambition of growth in various fields but both Adani groups and Reliance Industries Ltd. are in competition with each other in a few same sectors like Adani groups and family aims to build the renewable portfolio of wind, solar and hybrid power of 25 Gigawatt by 2025. On the other hand Reliance industries Ltd is also endeavoring to make entry into the solar, wind and power project at the international level. Adani Group has announced its plan to become the world’s largest renewable energy producer by 2030 and on the other side Reliance has expressed his idea of producing hydrogen from natural gas and other hydrocarbons supported by carbon capture and storage[9].
CONCLUSIONMerger and acquisitions now becoming a popular tool for companies that are struggling to survive. It also is a way of strong business to expand and grow expeditious using the already set up structures and manpower of the acquired companies. This process basically holds significance because it eases the restructuring of the business organization. It gives the different perspective and different management of working. Overall Merger and acquisition can be a positive step for both companies the acquired and acquirer but at the same time there should be checks and balances in place by the government to provide help and assistance to struggling companies, so that the fair practices in the market can be maintained. The risk of market monopoly should also be taken into consideration in this new world of free market.
References
[1] Marriam Webster Dictionary, https://www.merriam-webster.com/dictionary/merger (last visited on Aug. 13, 2022)
[2] Marriam Webster Dictionary, https://www.merriam-webster.com/dictionary/acquisition (last visited on Aug. 13, 2022)
[3]Forbes, https://www.forbes.com/real-time-billionaires/#64b156173d78 (Last visited on Aug. 13, 2022)
[4]Financial Express, https://www.financialexpress.com/economy/how-much-ambani-adani-earned-amid-covid-100-billionaires-income-equals-about-rs-1-lakh-each-for-14-cr-people/2177858/?lite=1 (Last visited on Aug. 13, 2022)
[5] https://startuptalky.com/reliance-industries-acquisitions/#:~:text=Den%20Networks%20and%20Hathway%20Cable%20%26%20Datacom%20Ltd.,-Startup%20Name&text=Reliance%20Jio%20bought%20a%20majority,in%20Hathway%20Cable%20%26%20Datacom%20Ltd
[6] Money Control, https://www.google.com/amp/s/www.moneycontrol.com/news/business/mergers-acquisitions/adani-group-building-an-empire-through-acquisitions-8517571.html/amp (Last visited on Aug. 13, 2022)
[7]Money Control, https://www.google.com/amp/s/www.moneycontrol.com/news/business/mergers-acquisitions/adani-group-building-an-empire-through-acquisitions-8517571.html/amp (Last visited on Aug. 13, 2022)
[8] Mint, https://www.livemint.com/news/india/adani-group-holcim-10-5-bln-acquisition-doubles-india-inc-s-deal-value-in-may-11655135827259.html (Last visited on Aug. 13, 2022)
[9] https://www.ndtv.com/business/ambani-vs-adani-at-5g-auction-but-no-direct-market-clash-yet-3144395?_gl=1*j4dg3n*_ga*S056cnlNOXZwY2ZmZFJKYzNQU1pZbVRUY09nRVJQeWs5UWNCc3RKcWtsTGV6RU0xVHNKRDZSb3hhREFzRWZSQw..#comments_result (Last visited on April 15, 2023)