Subject: Wang Dan Perbankan

Intruction: Satu artikel ilmiah (diiktiraf oleh SCOPUS/ISI)

Deadline: 30/11/2011
Journal Title: Do Mergers and acquisitions leads to a higher technical and
scale efficiency? A counter evidence from Malaysia (F.Sufian and M.Shah
Habinullah)

Part 1: Introduction: What is the mergers and acquisition? (2 pages)
Part 2: Isi Kandungan: (a) Process of merges & acquisition (how?) (5 pages)
(b) Benefits of merges & acquisition (why?) (5 pages)
(c) Problem of merges & acquisition (what?) (5
pages)
Part 3: Conclusion: Summaries the info from article (2 pages)
part 4: Biolografi (1 pages)

Okay, now we separate the work:
Murni: part 1, part 2 (a)
Murni's friend: part 2 (b), conclusion
Yen Sim: part 2 (c), Biligrafi (including binding & submit assignment
~Mergers and acquisitions (abbreviated M&A) reIers to the aspect oI corporate strategy,
corporate Iinance and management dealing with the buying, selling, dividing and combining oI
diIIerent companies and similar entities that can aid, Iinance, or help an enterprise grow rapidly
in its sector or location oI origin or a new Iield or new location without creating a subsidiary,
other child entity or using a joint venture. The distinction between a "merger" and an
"acquisition" has become increasingly blurred in various respects (particularly in terms oI the
ultimate economic outcome), although it has not completely disappeared in all situations.
An acquisition is the purchase oI one business or company by another company or other
business entity. Consolidation occurs when two companies combine together to Iorm a new
enterprise altogether, and neither oI the previous companies survives independently. Acquisitions
are divided into "private" and "public" acquisitions, depending on whether the acquiree or
merging company (also termed a target) is or is not listed on public stock markets. An additional
dimension or categorization consists oI whether an acquisition is friendly or hostile.
Achieving acquisition success has proven to be very diIIicult, while various studies have shown
that 50 oI acquisitions were unsuccessIul.
|1|
The acquisition process is very complex, with
many dimensions inIluencing its outcome.
|2|

Whether a purchase is perceived as being a "Iriendly" one or a "hostile" depends signiIicantly on
how the proposed acquisition is communicated to and perceived by the target company's board
oI directors, employees and shareholders. It is normal Ior M&A deal communications to take
place in a so-called 'conIidentiality bubble' wherein the Ilow oI inIormation is restricted pursuant
to conIidentiality agreements.
|3|
In the case oI a Iriendly transaction, the companies cooperate in
negotiations; in the case oI a hostile deal, the board and/or management oI the target is unwilling
to be bought or the target's board has no prior knowledge oI the oIIer. Hostile acquisitions can,
and oIten do, ultimately become "Iriendly", as the acquiror secures endorsement oI the
transaction Irom the board oI the acquiree company. This usually requires an improvement in the
terms oI the oIIer and/or through negotiation.
"Acquisition" usually reIers to a purchase oI a smaller Iirm by a larger one. Sometimes, however,
a smaller Iirm will acquire management control oI a larger and/or longer-established company
and retain the name oI the latter Ior the post-acquisition combined entity. This is known as a
reverse takeover. Another type oI acquisition is the reverse merger, a Iorm oI transaction that
enables a private company to be publicly listed in a relatively short time Irame. A reverse merger
occurs when a privately held company (oIten one that has strong prospects and is eager to raise
Iinancing) buys a publicly listed shell company, usually one with no business and limited
assets.
|4|

There are also a variety oI structures used in securing control over the assets oI a company,
which have diIIerent tax and regulatory implications:
O The buyer buys the shares, and thereIore control, oI the target company being purchased.
Ownership control oI the company in turn conveys eIIective control over the assets oI the
company, but since the company is acquired intact as a going concern, this Iorm oI
transaction carries with it all oI the liabilities accrued by that business over its past and all oI
the risks that company Iaces in its commercial environment.
O The buyer buys the assets oI the target company. The cash the target receives Irom the sell-
oII is paid back to its shareholders by dividend or through liquidation. This type oI
transaction leaves the target company as an empty shell, iI the buyer buys out the entire
assets. A buyer oIten structures the transaction as an asset purchase to "cherry-pick" the
assets that it wants and leave out the assets and liabilities that it does not. This can be
particularly important where Ioreseeable liabilities may include Iuture, unquantiIied damage
awards such as those that could arise Irom litigation over deIective products, employee
beneIits or terminations, or environmental damage. A disadvantage oI this structure is the tax
that many jurisdictions, particularly outside the United States, impose on transIers oI the
individual assets, whereas stock transactions can Irequently be structured as like-kind
exchanges or other arrangements that are tax-Iree or tax-neutral, both to the buyer and to the
seller's shareholders.
The terms "demerger", "spin-oII" and "spin-out" are sometimes used to indicate a situation where
one company splits into two, generating a second company separately listed on a stock exchange.
As per knowledge-based views, Iirms can generate greater values through the retention oI
knowledge-based resources which they generate and integrate. Extracting technological beneIits
during and aIter acquisition is ever challenging issue because oI organizational diIIerences.
Based on the content analysis oI seven interviews authors concluded Iive Iollowing components
Ior their grounded model oI acquisition:
1. Improper documentation and changing implicit knowledge makes it diIIicult to share
inIormation during acquisition.
2. For acquired Iirm symbolic and cultural independence which is the base oI technology
and capabilities are more important than administrative independence.
3. Detailed knowledge exchange and integrations are diIIicult when the acquired Iirm is
large and high perIorming.
4. Management oI executives Irom acquired Iirm is critical in terms oI promotions and pay
incentives to utilize their talent and value their expertise.
5. TransIer oI technologies and capabilities are most diIIicult task to manage because oI
complications oI acquisition implementation. The risk oI losing implicit knowledge is
always associated with the Iast pace acquisition.
Preservation oI tacit knowledge, employees and literature are always delicate during and aIter
acquisition. Strategic management oI all these resources is a very important Iactor Ior a
successIul acquisition.
Increase in acquisitions in our global business environment has pushed us to evaluate the key
stake holders oI acquisition very careIully beIore implementation. It is imperative Ior the
acquirer to understand this relationship and apply it to its advantage. Retention is only possible
when resources are exchanged and managed without aIIecting their independence.
edit] Distinction between mergers and acquisitions
Although oIten used synonymously, the terms merger and acquisition mean slightly diIIerent
things.This paragraph does not make a clear distinction between the legal concept oI a merger
(with the resulting corporate mechanics, statutory merger or statutory consolidation, which have
nothing to do with the resulting power grab as between the management oI the target and the
acquirer) and the business point oI view oI a "merger", which can be achieved independently oI
the corporate mechanics through various means such as "triangular merger", statutory merger,
acquisition, etc. When one company takes over another and clearly establishes itselI as the new
owner, the purchase is called an acquisition. From a legal point oI view, the target company
ceases to exist, the buyer "swallows" the business and the buyer's stock continues to be traded.
In the pure sense oI the term, a merger happens when two Iirms agree to go Iorward as a single
new company rather than remain separately owned and operated. This kind oI action is more
precisely reIerred to as a "merger oI equals". The Iirms are oIten oI about the same size. Both
companies' stocks are surrendered and new company stock is issued in its place.For example, in
the 1999 merger oI Glaxo Wellcome and SmithKline Beecham, both Iirms ceased to exist when
they merged, and a new company, GlaxoSmithKline, was created. In practice, however, actual
mergers oI equals don't happen very oIten. Usually, one company will buy another and, as part oI
the deal's terms, simply allow the acquired Iirm to proclaim that the action is a merger oI equals,
even iI it is technically an acquisition. Being bought out oIten carries negative connotations;
thereIore, by describing the deal euphemistically as a merger, deal makers and top managers try
to make the takeover more palatable. An example oI this would be the takeover oI Chrysler by
Daimler-Benz in 1999 which was widely reIerred to as a merger at the time.
A purchase deal will also be called a merger when both CEOs agree that joining together is in the
best interest oI both oI their companies. But when the deal is unIriendly (that is, when the target
company does not want to be purchased) it is always regarded as an acquisition.
http://en.wikipedia.org/wiki/Mergersandacquisitions
~Mergers and acquisitions: the process by a company buying another company
and combine the two together. M & A transactions are complex and risky that can
damage your shareholders, productivity and reputation. However, it is a powerful
tool to accelerate growth, whether due diligence is performed. Every company and
every merger is unique, but whatever your industry in question there are some key
strategies for successful integration.
First, a successful merger is to be built on an understanding of the main reason for
the transaction, savings, and assets you hope to win; secondly, with clear roles and
responsibilities essential to managing the process. Last but not least, to know the
true value cannot be avoided price, its about the integration and detention of the
expected synergies of the transaction.
There are many pros and cons of mergers and acquisitions, and they are by
management in the short and long term strategic acquisition of new companies and
determined. Some factors, market conditions, differences in corporate culture,
cost and changes to the financial strength to bid. Talking about the famous M & A
deal between Merrill Lynch and Bank of America has turned sour in 2008. She
was surrounded by complications of premiums for employees, has debts, and forces
his hand. Therefore, in April 2009, the U.S. Senate Committee opened an
investigation of the merger.
What are the differences between mergers and acquisitions? Although used
interchangeably, the average merger and acquisition of things a little different.
The company, another company acquires clear that the new owner. This is called an
acquisition. Legally, a member of the target company to exist and absorbs the
buyer of the company and the shares of the purchaser will continue to trade. A
merger is when two companies move forward as a single new company rather than
remain separately owned and operated agree. This would be considered a merger
of equals. "Both companies have given shares and issued new shares. The recent
mergers of equals do not happen very often. Typically, a company buying another
in the under the terms of the agreement, the Company acquired announce that the
action is a merger of equals, even if it is technically an acquisition.
There are various methods of financing mergers and acquisitions. Some are by how
they are financed and partly different from the relative size of the company. The
transactions are usually paid in cash rather than acquisitions called a merger, as
shareholders of the target company are removed and the target is under the
indirect control of the bidder to shareholders. Payment by selling shareholders of
the acquired company in a certain ratio in proportion to the amount assessed.
After all is said and done, it is not for everyone. Many companies figure the best
way is to go ahead with the property lines extend through M & A. While staying
other, public ownership of a subsidiary or business segment offers more
advantages. In theory, mergers create synergies, expand operations and reduce
costs and investors like the idea that the merger will provide enhanced market
power. However, investors on the complex issues of M & A. The best form of equity
structure to consider, a complete analysis of costs and benefits of up to discount.
http://www.selfproclaimedgenius.com/the-process-of-mergers-and-acquisitions/
~ Merger and acquisition process is the most challenging and most critical one when it comes to corporate
restructuring. One wrong decision or one wrong move can actually reverse the effects in an unimaginable manner. t
should certainly be followed in a way that a company can gain maximum benefits with the deal.


FoIIowing are some of the important steps in the M&A process:

Business VaIuation
Business valuation or assessment is the first process of merger and acquisition. This step includes examination and
evaluation of both the present and future market value of the target company. A thorough research is done on the
history of the company with regards to capital gains, organizational structure, market share, distribution channel,
corporate culture, specific business strengths, and credibility in the market. There are many other aspects that should
be considered to ensure if a proposed company is right or not for a successful merger.

ProposaI Phase
Proposal phase is a phase in which the company sends a proposal for a merger or an acquisition with complete
details of the deal including the strategies, amount, and the commitments. Most of the time, this proposal is send
through a non-binding offer document.

PIanning Exit
When any company decides to sell its operations, it has to undergo the stage of exit planning. The company has to
take firm decision as to when and how to make the exit in an organized and profitable manner. n the process the
management has to evaluate all financial and other business issues like taking a decision of full sale or partial sale
along with evaluating on various options of reinvestments.

Structuring Business DeaI
After finalizing the merger and the exit plans, the new entity or the take over company has to take initiatives for
marketing and create innovative strategies to enhance business and its credibility. The entire phase emphasize on
structuring of the business deal.

Stage of Integration
This stage includes both the company coming together with their own parameters. t includes the entire process of
preparing the document, signing the agreement, and negotiating the deal. t also defines the parameters of the future
relationship between the two.

Operating the Venture
After signing the agreement and entering into the venture, it is equally important to operate the venture. This
operation is attributed to meet the said and pre-defined expectations of all the companies involved in the process.
The M&A transaction after the deal include all the essential measures and activities that work to fulfill the
requirements and desires of the companies involved.
http://www.mergersandacquisitions.in/process-of-merger-and-acquisition.htm
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sLrong research flnanclal and accounL managemenL Leam Lo each engagemenL 1hese professlonals are
responslble for documenL preparaLlon research flnanclal analysls valuaLlon and Lhe Llme consumlng
[ob of geLLlng Lhe message ouL

1he key Lo our success ls Lhe Llme LesLed process Corum developed by Lurnlng years of experlence lnLo
besL pracLlces 1he merger and acqu|s|t|on process beglns wlLh creaLlng a conclse seL of documenLs
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course all documenLs are approved by you before Lhey are submlLLed Lo poLenLlal parLners

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http://www.corumgroup.com/account-support.aspx













Merger and Acquisition Process is probably the most important thing in a merger or acquisition deal as it influences
the benefits and profitability of the merger or acquisition. The Merger and Acquisition Process is carried out in some
steps which are discussed in the following page.


Merger and Acquisition Process is a great concern for all the companies who intend to go for a merger or an
acquisition. This is so because, the process of merger and acquisition can heavily affect the benefits derived out of
the merger or acquisition. So, the Merger and Acquisition Process should be such that it would maximize the benefits
of a merger or acquisition deal.

The Merger and Acquisition Process can be divided in to some steps. The stepwise implementation of any merger
process ensures its profitability.

PreIiminary Assessment or Business VaIuation
n this first step of Merger and Acquisition Process, the market value of the target company is assessed. n this
process of assessment not only the current financial performance of the company is examined but also the estimated
future market value is considered. The company which intends to acquire the target firm, engages itself in an
thorough analysis of the target firm's business history. The products of the firm, its' capital requirement, organizational
structure, brand value everything are reviewed strictly.

Phase of ProposaI
After complete analysis and review of the target firm's market performance, in the second step, the proposal for
merger or acquisition is given. Generally, this proposal is given through issuing an non-binding offer document.

Exit PIan
When a company decides to buy out the target firm and the target firm agrees , then the latter involves in Exit
Planning. The target firm plans the right time for exit. t consider all the alternatives like Full Sale, Partial Sale and
others. The firm also does the tax planning and evaluates the options of reinvestment.

Structured Marketing
After finalizing the Exit Plan, the target firm involves in the marketing process and tries to achieve highest selling
price. n this step, the target firm concentrates on structuring the business deal.

Origination of Purchase Agreement or Merger Agreement
n this step, the purchase agreement is made in case of an acquisition deal. n case of Merger also, the final
agreement papers are generated in this stage.

Stage of Integration
n this final stage, the two firms are integrated through Merger or Acquisition. n this stage, it is ensured that the new
joint company carries same rules and regulations through out the organizatio







Mergers and Acquisitions History can effectively help in gathering information about the significant mergers and
acquisitions of the world.

Mergers and Acquisitions History often surprises us as we come to know that the concepts of Mergers and
Acquisitions are not new, on the contrary they are continuing from the early years of history.

Mergers and Acquisitions History helps us to understand the evolution of the concepts of Mergers and Acquisitions
in the world. f we involve in the detailed analysis of the History of Merger of Acquisitions, we will find that Mergers
and Acquisitions started to take place in the world from very early years.
&$ Mergers and Acquisitions History


n USA, mergers and acquisitions started in twentieth century. After that Mergers and Acquisitions continued to occur
in cycle. These cycles of Mergers and Acquisitions, took place in USA in 1929, in the last half of 1960s, in the first
half of 1980s and again in the last half of 1990s. Here, it should be mentioned that, by cycle we are referring to the
period, in which the maximum number of mergers took place.

Among the mergers and acquisitions cycles cited above, the most significant mergers of USA took place in the last
half of 1990s. The reason of this was that, the stock market was quite strong in US in that period and this strong stock
market supported the high incidence of mergers and acquisitions. The mergers and acquisitions of this period
involved big brands and huge amount of dollars.
Significant Mergers and Acquisitions of the History
O n 1987, an Australian Company named Stephen Jaques Stone James, which was a partnership company with 79
partners, merged with the company named Mallesons. After the Merger, the new joint company was known as
Mallesons Stephen Jaques. This Merger contributed significantly to the telecommunication sector development in
Australia.
O n 1988, Tower Federal Savings Bank of ndiana acquired two financial institutions of Michigan. Then in 1991, the
Standard Federal Bank strengthened their position in Ohio by acquiring a financial institution of Toledo. These two
acquisitions had great impact on the banking Sector of USA.
http://finance.mapsofworld.com/merger-acquisition/history.html