Merger Model

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Merger model is one of the very relevant financial models in today’s scenario. Merger model in simple terms defines as a model which analyzes the impact or outcomes when a merger of two companies happens.

An acquisition or merger happens when a company proposes to offer cash or shares of the company to acquire another company. In all the cases, both the companies merge to form one single company, subject to the approval of the shareholders of both the companies. Below are the steps of how to build a merger model.

  1. Making Acquisition Assumptions
  2. Making Projections
  3. Valuation of Each Business
  4. Business Combination and Pro Forma Adjustments
  5. Deal Accretion/ Dilution
There are many examples available for a merger model. Some of the recent ones are Flipkart’s acquisition of ebay, Merger of Idea and Vodafone and Telenor merged with Airtel.
Acquisitions and mergers are strategic moves by the companies for various reasons. One of the major reasons is, foreseeing scope for business expansion. Generally, big organizations acquire smaller ones to strengthen their market presence or to wipe out the unnecessary competition from the market. Some mergers are to fill the loopholes- instead of so that to avoid they do it themselves from the scratch.

Rajagiri Centre for Business Studies is located in heart of Cochin, Kakkanad. RCBS is one of the major Business School in Kerala. They provide pg courses like MBA, PGDM, MHRM etc. Best B Schools in Kerala offer International MBA in Kerala.



Location: Kerala, India

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