RIL AND RPL MERGER CASE STUDY

Help Center Find new research papers in: RPL, then went public late that year to raise funds with a public issue of Rs crore, making it among the largest for the time. Synergetic advantage of strategic Mergers and Acquisitions. Usually, one company will buy another and, as part of the deal’s terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it is technically an acquisition. Mergers and Acquisitions is considered as one of the strategies for growth which have emerged as a natural process of business restructuring throughout the world. Internal growth may be achieved if a firm expands its operations or up scales its capacities by establishing new units or by entering new markets. This was to have a combination of equity shares and debentures.

However, if the ratio is more than around 18x, it would be adverse for RPL shareholders. The principal benefits from mergers and acquisitions can be listed as increased value generation, increase in cost efficiency and increase in market share. However, the decrease became insignificant after controlling for the performance of the control sample of peer companies. The declining interest coverage ratio of the acquirer company RIL from Secondly, the study is based purely on secondary data which are taken from the financial statements of the case through Internet only and therefore can’t be denied for any ambiguity in data used for the analysis. Enter the email address you signed up with and we’ll email you a reset link.

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This was to create an export-oriented refinery at Jamnagar. The data of just preceding years of the year the merger took place has dpl considered for pre-merger study and the data for the year has been used for post merger study. The issue had a size of Rs 2, crore and like the one inthe offer price was Rs 60 per unit.

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History repeats with RIL-RPL merger

Their results suggest that there are minor variations in terms of impact on operating performance following mergers, in different industries in India. Thus, the proposed merger would help RIL utilise this Cash flows in its other business verticals in a fruitful manner.

Objectives of the Study: The above position has graphically been presented as below: Companies intensely working in competitive business environment have to change fast as per the evolving dynamics in their industry of operation. Issn no volume 11 “Mergers and Acquisitions: A firm can achieve growth both internally and externally.

Below is the analysis from top brokerage houses across the country on studg deal abd who stands to benefit in the scheme of arrangement. Related It’s advantage Rpp in 1: This was to have a combination of equity shares and debentures.

ril and rpl merger case study

We believe given that RPL is yet to commence production from its new refinery the book value based swap ratio would not be an ideal indicator for fixing a swap ratio.

Synergetic advantage of strategic Mergers and Acquisitions. Alternatively, if RPL would have been maintained as a separate entity and had paid dividend to RIL, it would have attracted dividend distribution tax of Angel Broking RIL currently holds RIL currently holds The declining interest coverage ratio of the acquirer company RIL from Importance of the study: However, on book value basis, the ratio works out to be adverse for the RPL shareholders.

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RIL-RPL merger: Who benefits?

By examining the cash-flow performance in the five-year period following mergers, the study found evidence of improvements in operating performance, and also that the pre and post-merger performance was highly correlated. This will alert our moderators to take action. Your Reason has been Reported to the admin. Not all shareholders waited for the announcement.

ril and rpl merger case study

After merging RPL in to it in this ratio was increased to Though the theoretical assumption says that mergers improve the overall performance of the company due to increased market power, Tambi uses his paper to evaluate the same in the scenario of Indian economy. Remember me on this computer.

Merger ratio favours RPL shareholders: After merging RPL in to it this ratio was decreased to 9. In particular, rlp seem to have had a slightly positive impact on profitability of firms in the banking and finance industry, the pharmaceuticals, manufacturing sectors saw a marginal negative impact on operating performance.

ril and rpl merger case study

Hypotheses of the Study: My Saved Articles Sign in Sign up. Generally, the company that survives is the buyer which retains its identity and the seller company is extinguished. The researchers have made an dpl to study the impact of Mergers on financial performance of the sample company by using the available information for the period to The above Table shows the position of Reliance Industries Ltd.