1. CORPORATE ACCOUNTS
Names - Subhanil Bhadra,
Dhiraj Agarwal
Sec - F1
PPT TOPIC – Differentiate between external and internal reconstruction
A live case study on amalgamation/acquisition/merger .
“Examples of recent amalgamation”

2. What is “Reconstruction of a
company”??
A term used to describe the drastic formal
changes in a company’s capital structure as a
result of certain circumstances.

3. DIFFERENCE BETWEEN INTERNAL &
EXTERNAL RECONSTRUCTION.
INTERNAL RECONSTRUCTION EXTERNALRE CONSTRUCTION
1) No new company is formed. 1) A new company is formed by
The existing company the existing shareholder of the
continues as a going concern. old company to take over the
2) The ailing company will not give assets and liabilities.
its liquidation under the capital
reduction scheme. 2) The ailing company goes into
3) Involves complying the liquidation.
requirements under the
Companies Act. 3) There is no need to comply with
particular clause in the
Companies Act.

4. AMALGAMATION
"blending together of two or more undertakings into one
undertaking, the shareholders of each blending
company, becoming, substantially, the shareholders of
the blended undertakings. There may be
amalgamations, either by transfer of two or more
undertakings to a new company, or to the transfer of
one or more companies to an existing company”.

5. A live case study on
amalgamation/acquisition/merger
Company going public through an Amalgamation
Biosign Technologies Inc.
CNSX Symbol - BIO
Industry: Technology
Start of Trading: August 21, 2006
Initial Financing Raised: $6,000,000

6. Biosign amalgamated with an inactive former Capital Pool
Company (CPC) on the TSX Venture Exchange that had been unable to
complete its required qualifying transaction within the prescribed time
limits and had been delisted from the TSX Venture Exchange. Biosign
Technologies Inc. of Toronto completed its “going public” transaction on
CNSX through a reverse take-over transaction. The advantage for Biosign
in completing the amalgamation with the former company was that
regardless of the delisting it remained a "reporting issuer", which enabled
it to list quickly and easily on CNSX - Canadian National Stock
Exchange. As part of the amalgamation transaction and CNSX
listing, Biosign was able to complete a $6,000,000 private placement
financing.

7. "Biosign in the health market is about
standards, transparency, disclosure and interoperability and we saw
the same commitment at CNSX for our financial market. There are
no broker sponsor requirements nor arbitrary rules and procedures -
the listing criteria is the listing criteria - what you see is what you
get. This resonates with us in a world where clear strict criteria sets
the tone for globalization of products and services. So for us there
was a certainty of completing the transaction in an orderly fashion
which wouldn't distract us from our business execution. For our
shareholders it provided a marketplace where they not only could
effect auction market trading but could see all the regulatory filings
and press releases as well as our CNSX monthly reports to help them
keep up with our progress." - Richard Potts, CEO, Biosign
Technologies Inc.

8. MERGER
The combining of two or more companies, generally by
offering the stockholders of one company securities in the
acquiring company in exchange for the surrender of their
stock.

9. MERGER
CASE STUDY OF LAXMI NIWAS MITTAL:
There was a hue and cry when Mr. Laxmi Niwas Mittal took
over Luxembourg-based Arcelor Steel. Mittal Steel made a
daring $ 33 billion offer to take over its rival Arcelor. It was the
boldest offer by any NRI to be made. There were lots of
practical problems involved in acquisition. The French Govt
went to the extent of protecting their company and adopted
various techniques to prevent the acquisition.

10. Mr. Mittal pursued up to the hilt. He allayed the apprehensions of
the employees and also that of shareholders of Arcelor and after
prolonged battle the company was acquired and the transition has
been made smooth. Ultimately he created 100 million tonne steel
company. In one situation, the chopper in which LN Mittal was
traveling towards Paris was force landed by telling them that the
chopper entered the restricted area. The captain of the chopper
was so upset that he resigned to avoid such pressures. Then again
Arcelor tried to negotiate the deal with a Russian Steel giant
Severstal who was one of its competitors in order to checkmate
Mittal Steel. It was the toughest job for the Mr.Mittal to get the
merger process evened out. Ultimately he succeeded in his bid and
has become the President and CEO for Arcelor Mittal.

11. Now LN Mittal is the only Indian who controls any particular sector i.e.
Steel sector in the world. No other Indian in the earth controls any
particular sector but it has been made possible only for Mr.Mittal because
of his passion and perseverance to become number uno steel czar in the
world.
The global scenario has changed drastically especially after the
liberalization and privatization in India. The rapid growing technology has
made the globe smaller. People began understanding, respecting and
adopting the cultures of other countries. At the global level it is essential
to focus on multicultural skills. The cultural gap amongst all the countries
is getting narrowed down. And there are more efforts and avenues to
grasp various cultural diversities across the world. Many companies across
the world are coming to India and setting up their shops. It demonstrates
the strength of the Indian economy.

12. In the past we have seen global MNCs and now we are witnessing
Indian MNCs shopping across the globe and acquiring number of
strategically significant companies. In the past Indian companies fell
prey to global predators and now there is a U turn where Indian
companies have turned out to be predators.
The Indian economy is bullish with the GDP growing and inflation is
within the healthy limits. Indians need not to go overseas to work.
Rather they should work with in India itself so as to make Indian
economy more vibrant. There are plenty of opportunities with in
India itself. The foreign countries are getting more benefits by
making use of Indian talent and expertise. What we get in return is
far lesser than what we Indians invest in terms of abilities and
capabilities to other countries. It is time Indians realized their
inherent strengths and stayed in India itself.

13. ACQUISITION
The purchase of one corporation by another, through either the
purchase of its shares, or the purchase of its assets .
There's only one real way to achieve massive growth literally
overnight, and that's by buying somebody else's company.
Acquisition has become one of the most popular ways to grow
today. Since 1990, the annual number of mergers and acquisitions
has doubled, meaning that this is the most popular era ever for
growth by acquisition.

14. ACQUISITION
CASE STUDY: Tata Motors Acquisition
of Jaguar and Land Rover in 2008
VenkitV
Introduction
India-based Tata Motors Ltd. successfully acquired two
British automotive brands – Jaguar and Land Rover (JLR), in
June 2008 from Ford Motors for $ 2.3B. As part of the
deal, Tata Motors gained 100% stake in companies, 3 UK
plants, 2 advanced design and engineering centers, 26
national sales companies, IP rights, $1.1B in capital
allowances for taxes, and $600M in pension contributions.

15. In order to facilitate the deal, Tata Motors raised $3B through
bridge loans through a number of banks, including JP
Morgan, Citigroup and State Bank of India. Although analysts were
skeptical about the deal mainly due to the economic slowdown in
the major selling markets, Europe and North America, Tata Motors
had accumulated immense cash reserves (D/E ratio of 0.56) to
raise the required funds without endangering its own finances.
Ford Motor Company is the third largest automobile producer
worldwide and ten times the size of Tata Motors. The company is
known for low-priced automobile with standard interchangeable
parts, virtual manufacturing, safety focused and low fuel
consumption. It acquired JLR into its new group PAG, which
comprised of other brands including Aston Martin, Volvo and
Lincoln. In September 2006, Allan Mulally cleared the sale of
brands within PAG as part of restructuring exercise called “Way
Forward” in order to become more competitive. The decision
highlighted the fact that Ford had not accomplished its goal of
penetrating into luxury brands. Enclosed in the appendix is the
timeline of major highlights for JLR and the deal process followed
by Tata Motors.
Assess the pros and cons of Tata Motors’ acquisition of Jaguar and
Land Rover.

16. EXAMPLES OF RECENT AMALGATION
1) Hutch Essar into vodafone

17. 2) Generation tech & N-TEK corp. 2010