The document discusses six waves of mergers that have occurred throughout history. It outlines the key characteristics of each wave, from the first wave from 1898-1902 which led to monopolies, to the sixth wave from 2003 onward which has seen increased shareholder activism and private equity participation. It also provides examples of some large mergers from the 1990s as well as examples of failed and unfinished mergers.

1. Merger Trends
Dr Raju Indukoori

2. Waves of Merger

3. Waves of Merger
1st Wave : 1898 – 1902
2nd Wave : 1916 – 1929
3rd Wave : 1965-69
4th Wave : 1981-89
5th Wave : 1992-2000
6th Wave : 2003 Onwards
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4. Six Waves of Merger
1st Wave: 1898 – 1902
• Horizontal combinations
• Led to monopolies
• GE, Du pont, East man kodak
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5. Six Waves of Merger
2nd Wave: 1916 – 1929
• For oligopoly
• Fuelled post WW I boom
• Vertical mergers: FORD- Steel, rubber, own transportation.
• GM, IBM, Union carbide
• Food products, Chemicals, Metals, Petroleum and Transportation.
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6. Six Waves of Merger
3rd Wave : 1965-69
• High level of merger activity
• Booming American economy
• Acquisition of larger companies by smaller companies
• Conglomerates
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7. Six Waves of Merger
4th Wave: 1981-89
• Hostile takeovers
• Fortune 500 were target of acquirers
• Corporate raider : Green mail
• Use of debt to finance acquisition
• Role of investment bankers
• Global
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8. Six Waves of Merger
5th Wave: 1992-2000
• Mega and cross border mergers
• Deregulation, technology, Privatization and globalization
were reasons
• Banking, telecommunications, entertainment, media and
financial services.
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9. Six Waves of Merger
6th Wave: 2003 Onwards
• Shareholder activism
• Participation of private equity
• Leveraged Buyouts (LBOs)
• Active Indian Mergers
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10. Problem Mergers
Failed Mergers
1. AOL + Time Warner
Reason: Lack of Synergies
2. Air India + Indian Airlines
Reason: Employees
Unfinished Mergers
1. Sun Pharma + Taro Pharma (Israel)
Reason: Target Company
2. Bharthi Airtel + MTN (South Africa):
Reason: South African Government
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11. Top mergers in 1990s
# Year
Acquiring
Company
Country Sector Target Company
Countr
y
Sector
Value
(USD in
Billions)
1 1999
Vodafone
Airtouch PLC
UK Telecom Mannesmann
German
y
Telecom 183.00
2 1999 Pfizer USA Pharma Warner-Lambert USA Pharma 90.00
3 1998 Exxon USA Oil Mobil USA Oil 77.20
4 1998 Citicorp USA
Financial
Services
Travelers Group USA
Financial
Services
73.00
5 1999
SBC
Communications
USA Telecom
Ameritech
Corporation
USA Telecom 63.00
6 1999 Vodafone Group UK Telecom
Airtouch
Communication
USA Telecom 60.00
7 1998 Bell Atlantic USA Telecom GTE USA Telecom 53.36
8 1998 BP UK Oil Amoco USA Oil 53.00
9 1999
Qwest
Communication
USA Telecom US West USA Telecom 48.00
10 1997 World com USA Telecom
MCI
Communication
USA Telecom 42.00
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12. Dr Raju Indukoori
Top 10 Global M&A
# Acquirer Target
Value in
Billions
dollars
New Entity Year
1 AOL Time Warner 162 AOL Time Warner 2001
2 Pfizer Warner Lambert 90 Pfizer 1999
3 Exxon Mobil 82 Exxon Mobil 1999
4 Travelers Group Citi Corp 70 Travellers Group 1999
5 Nations Bank Bank of America 64 Nations Bank 1998
6 J P Morgan Chase Bank One Corp 58 J P Morgan Chase 2005
7 Procter & Gamble Gillette 57 Procter & Gamble 2005
8 Qwest US West 56.4 Qwest 2000
9 GTE Bell Atlantic 53 Verizon 2005
10 AT&T TCI 16 TCI 1998
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13. Top 10 Indian M&A
# Acquirer Target
Value in
Billions
dollars
Deal
Type of
Combination
Year
1 Tata Steel Corus 12.2 Cash Merger 2007
2 Vodafone Hutch Essar (67%) 11.1 Takeover 2007
3 Hindalco(Adity
a Birla Group)
Novelis (Canada) 6.0 Cash Merger 2007
4 Daiichi
Sankyo (Japan)
Ranbaxy (44%) 4.5 Cash Takeover 2008
5 ONGC Imperial Energy
(Russia)
2.8 Cash Merger 2009
6 NTT DoCo Mo Tata Tele 2.7 Equity Consolidation 2008
7 HDFC Bank Centurion Bank of
Punjab
2.4 Swap
(1:29)
Merger 2008
8 Tata Motors Jaguar Land Rover
(UK)
2.3 LBO Merger 2008
9 Sterlite Asacro (USA) 1.8 Cash Merger 2008
10 Suzlon R E Power
(Germany)
1.7 Merger 2007
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14. Internal Mergers
# Acquirer Target Deal Year
1 Reliance Industries Reliance Petroleum Equity Swap
(1:16)
2008
2 JSW Holdings JVSL Equity Swap
(1:8)
2004
3 Air India Indian Airlines 2007
4 BSNL MTNL 2012
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15. M&A of ICICI Bank
# Target Company Year
1
Shipping Credit Investment Corporation of
India (SCICI)
1996
2 ITC Classic Finance 1997
3 Anagram Finance 1998
4 Bank of Madura 2001
5 ICICI 2002
6 ICICI Personal Financial Services 2002
7 ICICI Capital Services 2002
8 Standard Chartered Grindlays Bank 2002
9 Sangli Bank 2007
10 Bank of Rajasthan 2010
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16. Any Questions….
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17. Thank You
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