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Introduction

The forces of globalization, technological change, and deregulation have created a highly competitive and dynamic business world where mergers are increasingly being used to seek competitive advantage and maximize value for shareholders. Consulting firm McKinsey & Co. conducted an eye-opening study of 193 mergers that took place between 1990 and 1997. They found that only 12 percent succeeded in maintaining revenue growth in line with their non-merged peers.

In the ideal market situation mergers do the work of channeling the resources to their best possible use. Although it's not possible to point one solution for transactions procedure here we have tried to look into the trends and some logics, which contribute to success of the mergers. We have tried to understand the factors that motivate the merger, the impact of culture as well as measures adopted in before and after merger phases for successful integration.

Requirement for Mergers

• Product line Gap - Gap is to be closed to complete a product line either in width, depth or geography by introducing improved or new products.

• Distribution Gap - This can reduce by increasing coverage and exposure and expanding distribution for global business development.

• Usage Gap - To increase users a firm must induce current nonusers to try the product or service and current users to increase their frequency of usage/purchase.

• Competitive Gap - This can be closed by making inroads into the market position of direct competitors as well as those who market allied products or services.

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* Contributed by -
Gulbahar Grover,
PGDIM - 11,
NITIE, Mumbai.