Mergers and acquisitions: Initiatives to prevent failures

Mergers and Acquisitions (M&As) are not new to India. However, they acquired prominence since liberalisation. The Indian companies are treating M&As as their strategic choice. Mergers and acquisitions are undertaken to fulfil various corporate objectives. They may be intended to reduce the likelihood of hostile takeovers, to diversify risk, or to achieve competitive advantage through synergistic efficiencies. M&As bring a number of changes within the organization. The size of the organizations change, its stocks, shares and assets change, even the ownership may also change. Thus, M&As show impact on employees, shareholders, management and on competition. The trend of Mergers and Acquisitions has been continuing in India with a rapid speed. During 2011, top 10 deals prove this. Government of India is also encouraging this trend liberalising rules of M&As through Competition Commission of India (CCI). No doubt this is the recent business world trend. However, there are many cases of failures in this arena. Therefore, it is high time to take certain initiatives to prevent failures of M&As to continue this trend going.