Mergers,

Acquisition and
Corporate
Restructuring

Submitted to: Mr Pardeep Singh

Pharmaceutical
Sector
 Acquisition of Pfizer and Seagen Inc.
~ Harsh Raj (BMS/22/21)
Pfizer
Pfizer is a global pharmaceutical and biotechnology company known for its
innovative medicines and vaccines. It has been at the forefront of healthcare
solutions, evolving from a chemical manufacturer to a leader in
biopharmaceuticals.

Some key milestones include:

1849: Founded by Charles Pfizer and Charles Erhart in Brooklyn, New York,
initially producing chemicals.
1942: Became a leader in penicillin production during World War II.
1950: Introduced Terramycin, its first product developed in-house, marking its
transition to a research-based pharmaceutical company.
1999: Acquired Warner-Lambert, gaining control of Lipitor, a blockbuster
cholesterol drug.
2020: Partnered with BioNTech to develop one of the first mRNA-based COVID-
19 vaccines.
2023: Acquired Seagen Inc. to expand its oncology portfolio.

Seagen Inc.
Seagen is a biotechnology company specializing in cancer treatments,
particularly antibody drug conjugates (ADCs)t which deliver targeted cancer
therapies with reduced side effects
1998: Founded as Seattle Genetics.

2011: its first ADC therapy, received FDA (Food & Drug Administration) approval,
revolutionizing Hodgkin's lymphoma treatment
2020: Rebranded as Seagen to reflect its global ambitions.
2022: Expanded its portfolio with FDA approval of a treatment for cervical
cancer.
2023 Acquired by Pfizer in a $43 billion deal

Acquisition of Pfizer and Seagen Inc.

The acquisition of Seagen by Pfizer is a transformative event in the
pharmaceutical industry, combining Pfizer's global scale with Seagen’s cutting-
edge ADC technology.

Key Points:
• Completion: The acquisition was finalized in March 2023
• Combined Entity: Seagen operates as a distinct unit within Pfizer, ensuring the
continuity of its innovative culture.
• Strategic Rationale: The deal aims to strengthen Pfizer's position as a leader
in oncology by leveraging Seagen's ADC expertise.
• Financials: Pfizer paid $43 billion in cash, a significant investment reflecting its
commitment to long-term growth in oncology.

Historical Context:
• Pfizer’s Oncology Focus: Pfizer's oncology portfolio includes innovative
treatments like Ibrance and Comirnaty. The acquisition addresses revenue gaps
due to upcoming patent expirations.
• Seagen's ADC Leadership: Seagen has a robust portfolio of FDA-approved
ADCs and a promising pipeline of new therapies.
• Market Trends: The acquisition aligns with industry trends of consolidation
and specialization in biopharmaceuticals.

Impact:
• Enhanced R&D: The merger accelerates the development of innovative cancer
treatments by combining Pfizer's resources with Seagen's research capabilities.
• Revenue Growth: Seagen's therapies, which generated $2 billion in 2022, are
expected to contribute over $10 billion annually by 2030.
• Global Reach: Pfizer’s distribution network will expand Seagen's therapies to
underserved markets.
• Competition: The acquisition intensifies competition in the oncology market,
especially in ADCs.

Challenges:
• Integration: Balancing Pfizer's corporate structure with Seagen's innovative
culture is critical.
• Regulatory Scrutiny: Large acquisitions in the pharmaceutical sector often
faces regulatory hurdles.
• Employee Concerns: Addressing concerns about job roles and organizational
changes is vital for a smooth transition.

Conclusion:
The Pfizer-Seagen acquisition is a strategic move with the potential to redefine
cancer treatment globally. While challenges remain, the successful integration
of these companies could establish Pfizer as the undisputed leader in oncology
innovation and market presence.
 Merger of Sun Pharma and Ranbaxy
~ Mohan Kumar (BMS/22/26)
Sun Pharmaceutical Industries Limited
Sun Pharmaceutical Industries Limited is one of the largest and most prominent
pharmaceutical companies in India and a major player in the global
pharmaceutical market.
Sun Pharma has emerged as a global powerhouse in the pharmaceutical
industry, driven by its focus on innovation, strategic acquisitions, and
commitment to affordable healthcare.

1983: Foundation
Sun Pharmaceutical Industries was founded by Dilip Shanghvi in Vapi, Gujarat,
with a focus on manufacturing psychiatry products.
1989: Expansion into Cardiology and Chronic Therapy
Entered the cardiology segment, marking the beginning of its diversification into
chronic therapy areas.
1994: Initial Public Offering (IPO)
Launched its IPO and became a publicly listed company, raising funds to fuel its
growth.
1997: First Major Acquisition
Acquired Milmet Labs and Gujarat Lyka Organics, strengthening its foothold in
the domestic market.
1998: Entry into the US Market
Established Caraco Pharmaceutical Laboratories in the United States, marking its
entry into the world's largest pharmaceutical market.
2004: Acquisition of Phlox Pharma
Acquired Phlox Pharma, gaining expertise in ophthalmology and injectable
products.
2005: R&D Investments
Opened a state-of-the-art R&D centre in Baroda, Gujarat, to focus on complex
generics and novel drug delivery systems.
2007: Global Expansion via Acquisition
Acquired Taro Pharmaceuticals in Israel after a legal battle, significantly boosting
its dermatology portfolio and global presence.
2012: Launch of Specialty Products
Began investing in specialty products, focusing on dermatology, oncology, and
ophthalmology, marking a strategic shift from generics.
2014: Acquisition of Ranbaxy Laboratories
Acquired Ranbaxy in an all-stock deal valued at S4 billion, becoming India's
largest pharmaceutical company and the fifth-largest specialty generics
company globally

Ranbaxy Laboratories Limited

Ranbaxy Laboratories Limited, established in 1961, was one of India's most
prominent pharmaceutical companies, widely recognized for its generics and
active pharmaceutical ingredients (APIs). It played a pioneering role in placing
Indian pharmaceuticals on the global map by making affordable medicines
accessible worldwide.
1961: Foundation of Ranbaxy Laboratories
Established by Ranbir Singh and Gurbax Singh, deriving the company name from
their initials ("Ran" and "Baxy").
1973: Acquisition by Bhai Mohan Singh
Bhai Mohan Singh took over Ranbaxy, laying the foundation for its rapid growth.
1985: First International Foray
Expanded operations into international markets by entering Malaysia, marking
its global footprint.

1991: USFDA Approval

Received its first USFDA approval, becoming the first Indian pharmaceutical
company to enter the regulated US market.
1993: Listing on the New York Stock Exchange (NYSE)
Became the first Indian pharmaceutical company to list on the NYSE, showcasing
its global ambitions.
1997: Launch of R&D Centre in Gurgaon
Inaugurated a state-of-the-art Research and Development centre in Gurgaon to
focus on dmg discovery and innovation.
1998: First US Generic Drug Approval
Achieved a milestone by receiving USFDA approval for its generic version of an
antibiotic, boosting its reputation as a global generic manufacturer.
2004: Global Revenue Milestone
Became the first Indian pharmaceutical company to cross $1 billion in global
revenues.
2008: Acquisition by Daiichi Sankyo
Japan's Daiichi Sankyo acquired a controlling 63.9% stake in Ranbaxy for $4.6
billion, making it one of the largest deals in the Indian pharmaceutical sector.
2013: Regulatory Challenges
Faced major regulatory sanctions by the USFDA due to non-compliance with
Good Manufacturing Practices (GMP) at multiple facilities. This significantly
impacted its global reputation and financial performance.
2014: Acquisition by Sun Pharmaceutical Industries
Sun Pharma acquired Ranbaxy in an all-stock transaction valued at $4 billion.
This marked the end of Ranbaxy as a standalone company and established Sun
Pharma as the largest pharmaceutical company in India.
The acquisition of Ranbaxy Laboratories Ltd. by Sun Pharmaceutical Industries
Ltd. represents a landmark transaction in the Indian pharmaceutical industry.
Announced in April 2014 and completed in March 2015, the $4 billion deal
solidified Sun Pharma's position as the largest pharmaceutical company in India
and the fifth-largest specialty generics company globally.

Key Details of the Acquisition

Transaction Overview:
Sun Pharma acquired 100% equity of Ranbaxy from its parent company, Daiichi
Sankyo, through an all-stock transaction.
The total deal value was approximately $4 billion, including $3.2 billion in equity
and $800 million of Ranbaxy's debt.
Share Swap Agreement:
Shareholders of Ranbaxy received 0.8 shares of Sun Pharma for every I share of
Ranbaxy held.
Regulatory Approvals:
The deal was subject to approvals from regulatory authorities, including the
Competition Commission of India (CCI), the US Federal Trade Commission (FTC),
and other international regulators.
To address anti-competition concerns, the CCI required the divestment of seven
overlapping products from the combined portfolio.

Strategic Rationale for the Merger

Market Leadership:
The merger created India's largest pharmaceutical company and enhanced its
global standing in the generic medicines market.
Expanded Portfolio:
Ranbaxy’s strong portfolio of branded generics and Sun Pharma's specialty drugs
complemented each other, providing a broader product offering.
Global Presence:
Ranbaxy’s extensive presence in over 65 countries, including key emerging
markets, significantly bolstered Sun Pharma's international footprint.
Operational Synergies:
The transaction was expected to generate $250 million in cost synergies within
three years, primarily through optimization of manufacturing operations, supply
chain, and R&D efforts.

Key Challenges and Risks

Regulatory and Compliance Issues:
At the time of the merger, Ranbaxy faced significant regulatory scrutiny due to
USFDA sanctions on four of its manufacturing facilities for non-compliance with
quality standards. These issues posed reputational and operational risks for Sun
Pharma.
Integration Complexity:
The integration of two large organizations with diverse cultures, systems, and
operational processes presented significant challenges.
Inherited Financial Liabilities:
Sun Pharma assumed Ranbaxy's debt obligations of approximately $800 million,
along with potential liabilities related to regulatory non-compliance.

Post-Merger Impact
Market Position:
The merger established Sun Pharma as a global leader in the generics and
specialty pharmaceuticals sector, with over 45 manufacturing facilities
worldwide and a diversified product portfolio.
Operational and Financial Outcomes:
While the acquisition added significant revenue streams, the initial impact on
profitability was mitigated by integration costs and Ranbaxy's legacy regulatory
challenges.
R&D Strengthening:
The combined R&D capabilities enhanced the company's focus on complex
generics and specialty drugs, supporting long-term growth objectives.
Global Expansion:
The deal provided Sun Pharma with a stronger foothold in the US, Europe, and
emerging markets, reinforcing its global strategy.

Conclusion
The acquisition of Ranbaxy by Sun Pharma was a strategic move to achieve scale,
expand global market presence, and diversify product offerings. While the
transaction faced initial challenges due to Ranbaxy's regulatory and operational
issues, Sun Pharma demonstrated resilience by addressing these concerns and
successfully integrating the two organizations. The merger underscores the
importance of strategic consolidation in the pharmaceutical industry to create
sustainable competitive advantages, enhance operational efficiency, and drive
innovation in a competitive global marketplace
 Merger of Pfizer and Pharmacia
~ Nikhil Das (BMS/22/28)
Pfizer
Pfizer was a pharmaceutical company that developed and sold a variety of
products, including painkillers, antiseptics, and antidepressants.
1886 W.E. Upjohn, M.D founded The Upjohn Pill and Granule Company in
Kalamazoo, Michigan

1971 Pfizer acquired Mack a German company that manufactured

pharmaceuticals, chemicals, and consumer products
1991 Pfizer began marketing Zoloft, an antidepressant developed by Pfizer
chemists Kenneth Koe and Willard Welch
1995 Pharmacia AB and The Upjohn Company merged to form Pharmacia &
Upjohn

Pharmacia
Pharmacia was a pharmaceutical company with origins in Sweden and the
United States.
Pharmacia was founded in 2000 through the merger of Pharmacia & Upjohn and
Monsanto's pharmaceutical division.
The company was primarily involved in oncology, immunology, neuroscience, and
cardiovascular drugs.
Notable product: Celebrex (pain relief, arthritis).
Acquired by Pfizer in 2003 for $60 billion.

Key Points
Merger of Pfizer and Pharmacia
- Year: 2003
- Value: $60 billion ( all-stock transaction).
- Purpose: Pfizer aimed to strengthen its market position in the pharmaceutical
industry.
- Result: Creation of the world's largest pharmaceutical company.
Strategic Goals
- Enhance product pipeline and R&D capabilities.
- Expand global reach and market share.
- Leverage operational synergies and cost savings.
Major Products Involved
- Celebrex - A blockbuster arthritis treatment from Pharmacia.
- Genotropin - A growth hormone-
- Expanded portfolio in oncology, pain management, and endocrinology.

Challenges
Integration Complexity
- Combining two large-scale organizations with distinct corporate cultures and
systems.
- Redundancies in staff and facilities required difficult downsizing decisions.
Regulatory Scrutiny
- Intense review by antitrust authorities to ensure fair competition in the market
- Some assets had to be divested to comply with regulatory conditions.
Market Reaction
- Initial skepticism from investors regarding the execution of synergies and long-
term benefits.

Impact
Market Leadership:
- Pfizer became the undisputed leader in the pharmaceutical industry, with over
11% global market share

Cost Synergies:
- Achieved annual cost savings of approximately $2.5 billion by 2005, primarily
through operational efficiencies.
R&D Advancements
- Combined R&D capabilities allowed Pfizer to strengthen its pipeline, though
criticism persisted over innovation output.
Economic Effects
- Pfizer gained access to Pharmacia's key products and patents, leading to a
robust product portfolio and revenue boost.
Conclusion
The Pfizer-Pharmacia merger solidified Pfizer’s position as a pharmaceutical
giant. Despite initial challenges, the M&A resulted in significant synergies,
expanded market presence, and enhanced capabilities- However, it also
highlighted the complexities of integrating large organizations and the need for
strategic innovation to maintain growth.
Aviation Sector
 Merger of Air India and Air Vistara
~ Raghav Ramachandran (BMS/22/35)
Air India
Air India has a long and storied history, evolving from a small regional airline into
the flag carrier of India. Some key milestones include:
1932: Founded by J.R.D. Tata as Tata Airlines, initially carrying mail and
passengers within India.
1946: Became a public limited company and renamed Air India
1946: Government of India acquired a 49% stake.
1953: Nationalized by the Indian Government

1962: Became the world's first all-jet airline.

2007: Merged with Indian Airlines to form National Aviation Company of India
Ltd.
2022: Acquired by the Tata Group, marking a return to its roots.
Air India played a significant role in connecting India to the world and has been
a symbol of the country's aviation prowess.

Air Vistara
Vistara was an Indian full-service airline, a joint venture between Tata Sons and
Singapore Airlines.
Founded: 2013
Commenced Operations: January 9, 2015
Ceased Operations: November 12, 2024 (merged with Air India)
Joint Venture: A partnership between the Tata Group (51 % stake) and Singapore
Airlines (49% stake).
Premium Service: Positioned itself as a premium carrier, emphasizing
exceptional service, modern aircraft, and comfortable cabins.

Network: Served over 50 destinations across India and internationally.

Merger: Merged with Air India in November 2024, with Singapore Airlines
retaining a 25.1% stake in the combined entity.

Merger of Air India and Air Vistara

Vistara aimed to provide a unique flying experience that combined the Tata
Group's legacy in Indian aviation with Singapore Airlines' renowned service
excellence. The merger of Air India and Vistara is a significant event in the history
of Indian aviation- Here's a breakdown of the key aspects and the broader
context of this corporate restructuring-

Key Points:
Completion: The merger was officially completed on November 12, 2024.
Combined Entity: The merged entity operates under the Air India brand, offering
over 5,600 weekly flights across more than 90 destinations.
Strategic Rationale: The merger aims to create a stronger, more competitive
player in the Indian aviation market, leveraging the strengths of both airlines.
Shareholding: Singapore Airlines, a former partner in Vistara, now holds a 25.1%
stake in the expanded Air India.
Historical Context:
Tata's Return to Aviation: The Tata Group's acquisition of Air India in 2022
marked its return to the aviation sector after decades of government ownership.
Consolidation Efforts: The merger with Vistara follows the earlier merger of Air
India Express and AIX Connect (formerly AirAsia India), demonstrating Tata's
strategy to consolidate its aviation businesses.
[Link]: This merger is part of the broader "Vihaan-Al" transformation
program, which aims to establish Air India Group as a world-class global aviation
company.

Impact:
Increased Market Share: The combined entity is expected to have a significant
market share in both domestic and international routes.
Enhanced Service Offerings: The merger aims to provide passengers with a wider
range of travel options and improved service quality-
Competition: The merged entity is expected to intensify competition in the Indian
aviation market.

Challenges:
Integration: Successfully integrating the operations and cultures of two distinct
airlines can be challenging.
Employee Concerns: Addressing the concerns of employees from both airlines
regarding job security, roles, and working conditions is crucial.
Customer Experience: Maintaining a high level of customer service and
satisfaction during and after the merger is essential.

In Conclusion:
The Air India-Vistara merger is a complex and ambitious undertaking with the
potential to reshape the Indian aviation landscape- While challenges remain, the
successful integration of these two airlines could create a powerful force in the
global aviation market.
 Merger of Jet Airways and Etihad Airways
~ Shaury Chak (BMS/22/43)
Introduction
This merger involved a strategic equity investment by Etihad Airways, the
national airline of the United Arab Emirates, in Jet Airways, a major Indian
airline. While not a traditional merger where two companies fully combine, this
investment had a profound impact on Jet Airways' operations and its position in
the global aviation market.

Key Mergers and Acquisitions in Jet Airways' History

Acquisition of Air Sahara: In 2007, Jet Airways acquired Air Sahara, a domestic
airline. This acquisition significantly expanded Jet Airways' domestic network and
fleet size.
Strategic Investment by Etihad Airways: In 201 3, Etihad Airways acquired a 24%
stake in Jet Airways, forming a strategic partnership. This involved a significant
equity investment and a comprehensive commercial and operational alliance.

Merger Details
Investment: In 2013, Etihad Airways acquired a 24% stake in Jet Airways.
Strategic investment: went beyond a simple equity stake. It involved a
comprehensive strategic partnership, encompassing areas such as:
 • Code-sharing agreements: Expanding global reach through each other's
networks.
• Joint loyalty programs: Enhancing customer benefits for frequent flyers.
• Maintenance and engineering services: Leveraging Etihad Airways'
expertise in aircraft maintenance.
• Commercial and operational cooperation: Collaborating on areas like
revenue management, sales, and marketing.

Rationale for the Investment

Expanding Global Reach: Etihad Airways aimed to leverage Jet Airways' strong
domestic network in India to expand its global reach, particularly in the rapidly
growing Indian market.
Strengthening Hub: The investment was part of Etihad Airways' strategy to
establish Abu Dhabi as a major global aviation hub, connecting passengers from
India and other parts of Asia to its extensive global network.
Gaining Market Share: The partnership aimed to enhance Jet Airways'
competitiveness in the Indian market and increase its market share.

Challenges and Outcomes

Financial Difficulties: Despite the strategic partnership, Jet Airways faced
significant financial challenges, including high debt levels, rising fuel costs, and
intense competition.
Operational Issues: The airline struggled to integrate the partnership effectively
and achieve the desired synergies.
Decline and Collapse: Ultimately, Jet Airways encountered severe financial
difficulties, leading to its grounding and eventual liquidation in 2019.

Related Topics
Impact on the Indian Aviation Market: The Jet-Etihad partnership had a
significant impact on the Indian aviation market, increasing competition and
influencing the competitive dynamics of the industry.
Lessons Learned: The Jet Airways-Etihad Airways case study provides valuable
lessons regarding the challenges and complexities of international airline
partnerships, the importance of financial sustainability, and the need for effective
integration strategies.

Conclusion
While the Jet Airways-Etihad Airways partnership did not achieve its full
potential, it serves as a significant example of strategic alliances in the global
aviation industry. The case highlights the potential benefits of such
collaborations, including expanded reach, enhanced customer offerings, and
improved operational efficiency. it also underscores the critical However,
importance of addressing financial challenges, maintaining operational stability,
and effectively managing the complexities of cross-border partnerships.
 Merger of Air India Express and AIX Connect
~ Shiva Gupta (BMS/22/45)
Introduction
In a strategic move to consolidate its low-cost operations, the Air India Group has
successfully merged Air India Express and AIX Connect (formerly AirAsia India).
This merger aims to streamline services, optimize resources, and enhance market
unified entity will operate under the Air India Express brand, signifying a new
chapter in India's aviation sector.

Background
Air India Express, established in 2005, has been a prominent player in the low-
cost carrier segment, primarily focusing on short-haul international routes
connecting India with the Middle East and Southeast Asia. AIX Connect, initially
launched as AirAsia India in 2014, operated domestic flights within India. The
Tata Group, after acquiring a 100% stake in AirAsia India, rebranded it as AIX
Connect in December 2022, setting the stage for its integration with Air India
Express.

Merger Timeline
June 2022: The Competition Commission of India approved Air India's proposal
to acquire a 16.33% stake from AirAsia in AirAsia India.
November 2022: Air India signed agreements to acquire AirAsia India,
announcing plans to merge it with Air India Express.
December 2022: AirAsia India was rebranded as AIX Connect.
March 2023: Integration of reservation systems and customer interfaces of Air
India Express and AIX Connect was completed.
October 2024: The Directorate General of Civil Aviation (DGCA) announced the
successful completion of the merger.

Strategic Objectives
The merger aligns with Air India's [Link] transformation plan, which focuses
on:
Fleet Expansion: The combined fleet has grown to 88 aircraft, with plans to
exceed 100 by the end of the current financial year.
Network Optimization: Enhancing connectivity across India, the Gulf, and
Southeast Asia to meet the growing demand for air travel.
Cost Efficiency: Achieving economies of scale by optimizing operational costs and
better utilizing assets.

Financial Performance
In the fiscal year 2023-24, Air India Express reported a net loss of ₹163 crore, a
decline from a profit of ₹117 crore in the previous year. Despite a 33% increase
in income to ₹7,600 crore, expenditures rose by 38.3% to ₹7,763 crore. The
integration with AIX Connect is expected to expedite the path to profitability by
achieving significant scale and optimizing costs.

Future Outlook
The merged entity aims to cater to India’s aspirational youth by offering
appealing value products. With a focus on fleet modernization, network
expansion, and service enhancement, the airline is poised to strengthen its
position in the competitive low-cost carrier market. The insights gained from this
merger are anticipated to be valuable for the upcoming integration of Vistara
into Air India, further consolidating the group’s market presence.

Conclusion
The merger of Air India Express and AIX Connect marks a significant milestone in
the Air India Group’s transformation journey. By unifying their low-cost
operations, the group is better positioned to serve the evolving needs of the
aviation market, drive long-term profitability, and contribute to the growth of
India’s aviation sector
Banking Sector
Merger of Bank of Baroda, Vijaya Bank and Dena Bank
~ Nabin Barman (BMS/22/57)
Bank of Baroda
Bank of Baroda was founded on July 20, 1908, by Maharaja Sayajirao Gaekwad
III of Baroda, originally as a private bane The bank's headquarters is in Vadodara,
Gujarat, with its corporate office located in Mumbai, Maharashtra. Bank of
Baroda expanded quickly, opening a branch in Ahmedabad in 1910. In 1969, as
part of India's wave of nationalization, the bank became a public sector
institution alongside 13 other major commercial banks.

Vijaya Bank
Vijaya Bank was established on October 23, 1931, by Shri A.B. Shetty and a group
of entrepreneurial farmers from Bangalore, Karnataka. The bank became a
scheduled bank in 1958 and was nationalized on April 15, 1980. Vijaya Bank grew
steadily over the years, merging with several smaller regional banks, which
helped it become a prominent player in India's banking sector.

Dena Bank
Founded on May 26, 1938, as Banking Company Ltd., Dena Bank was created by
the family of Devkaran Nanjee. The bank changed its name to Dena Bank in 1939
after becoming a public company- Like Bank of Baroda and Vijaya Bank, Dena
Bank was nationalized on July 19, 1969, and its headquarters was in Mumbai,
Maharashtra.

The Merger of Bank of Baroda, Vijaya Bank, and Dena Bank

On September 17, 2018, the Indian government announced the merger of three
major public sector banks. Bank of Baroda, Vijaya Bank, and Dena Bank. The goal
of the merger was to create a stronger financial institution to compete with the
larger private sector banks in India. The combined entity, with assets exceeding
Rs 14 lakh crore, became the third-largest lender in India, following State Bank
of India and HDFC Bank.

Key details of the merger include:

Government Approval: The Indian government formally approved the merger on
January 2, 2019, and the merged entity officially began operations on April 1,
2019.
Share Exchange Ratios: Under the terms of the merger, shareholders of Dena
Bank received 110 shares of Bank of Baroda for every 1,000 shares held, while
Vijaya Bank shareholders received 402 shares of Bank of Baroda for every 1,000
shares.
Government Capital Support: To stabilize the merged entity, the Indian
government provided crore in capital to Bank of Baroda, ensuring that the new
institution was financially strong and capable of absorbing the challenges that
came with the merger
Reduction of Non-performing Assets (NPAs): A significant driver of the merger
was the goal to reduce NPAs- Dena Bank, in particular, faced a high NPA ratio of
22%. The combined entity aimed to streamline the NPA issue, improving the
financial health of the new bank.
Expanded Market Presence:
The merger made Bank of Baroda the second-largest bank in India by branch
With an expected total business of over Rs. 15 trillion, the merged bank had a
far-reaching presence, offering a wider range of banking services and products
to its larger customer base.
Customer Benefits:
Customers benefited from the merger through expanded banking products and
services. The larger network meant more options and easier access to banking
services, which helped improve the overall customer experience.
Cultural and Operational Integration:
The merger brought together three distinct banks, each with its own corporate
culture, operational processes, and systems. Aligning these was a complex
process Employees had to adjust to new organizational structures and
leadership, while the bank worked to integrate its technological platforms,
including its CBS system (Finacle), to ensure smooth operations.

Challenges of the Merger

Despite the potential advantages, the merger of these three major public sector
banks faced several challenges:
Cultural Integration: Each bank had a different organizational culture, which
created difficulties in merging work environments, values, and practices Aligning
the employees from these institutions, each with distinct ways of operating,
required significant effort Resistance and uncertainty during this transition
period were inevitable.
Operational Integration: While the three banks operated on the same CBS
platform (Finacle), the operational integration of their processes and systems
was challenging. The merger involved consolidating numerous branches,
customer accounts, and services, all of which required significant coordination.
Non-performing Assets (NPAs): The high NPAs of Dena Bank, in particular, posed
a financial challenge. Even though the merger was aimed at reducing these bad
loans, the increase in NPAs across the combined entity affected profitability,
especially in the short term.
Customer Retention and Service Disruptions: During the transition, customers
faced changes in processes and services. This led to initial confusion and
dissatisfaction, and the bank had to work hard to ensure that customer service
remained consistent. The mergers implementation required clear
communication to help customers adjust.
Regulatory and Compliance Challenges: The merger required careful navigation
of regulatory and legal processes. Maintaining compliance with various
government regulations and banking laws was a demanding task for the newly
merged entity.
Conclusion
The merger of Bank of Baroda, Vijaya Bank, and Dena Bank represented a
significant restructuring in India's banking sector, aiming to create a more
competitive and financially resilient institution. With assets over lakh crore, the
new entity became the third-largest bank in the country, offering a broader range
of services and improved access to banking products.
While the merger brought significant benefits, including a larger customer base,
improved financial strength, and a more extensive network, it also faced
challenges in terms of cultural integration, operational alignment, and managing
NPAs. Despite these difficulties, the long-term goal was to create a stronger,
more efficient financial institution, and over time, the merged Bank of Baroda is
expected to overcome the initial hurdles and emerge as a major player in India's
banking sector, offering better services to its vast customer base.
 Merger of Andhra Bank, Union Bank of India and
Corporation Bank
~ Shubham Kumar (BMS/22/65)

Union Bank Of India

Union bank of India was registered on 1 lth November 1919 and it has limited
company in Mumbai and it was inaugurated by Mahatma Gandhi. ATMs was
introduced firstly in India by union bank of India.

Andhra Bank
Andhra bank is an Indian public sector bank. It was registered on 20th November
1923. Andhra bank was founded by the eminent freedom fighter and the
multifaceted genius, Dr. Bhogaraju Sitaramayya. It has more than 1900
branches, 15 extension counters and also more than 1100 automated teller
machines.
It operates in 25 states and three Union Territories. Andhra bank has its
headquarters in Hyderabad , India. It has pioneer in introducing credit cards in
the country in 1981.

Corporation Bank
Corporation bank was founded in the year 1906 in Udupi in a small town of South
India. In 1980 Corporation Bank was Nationalized and been public in 1998.
Corporation Bank holds a unique record of posting profits right from inception.
FY 2010-11 uninterrupted dividend payment track record since inception and
declared highest ever dividend of 200%.
Merger
The merger of Union Bank of India, Andhra Bank, and Corporation Bank was a
significant consolidation effort in the Indian banking sector. On 1st April 2020
Andhra Bank , Corporation Bank merged into Union Bank Of India.
The Central government in exercise of the powers conferred by section 9 in the
banking companies Act 1970/1980 after consultation with RBI notified the
amalgamation of Andhra Bank and Corporation Bank into Union Bank Of India
Scheme 2020.
Union Bank became the country's fifth largest public sector lender after
amalgamating Andhra Bank and Corporation Bank into Union Bank.
After the merger all the employees, customers, and branches of Andhra Bank and
Corporation Bank became the part of the Union Bank Of India.
The merger generated the cost and revenue synergies to the tune of INR 2, 500
crores over the next three years.
After merger it became the India's fourth largest banking network and the fifth
largest public sector bank.

Merger Structure
Union Bank of India as the Anchor Bank: Union Bank of India was chosen as the
anchor bank, and Andhra Bank and Corporation Bank were merged into it.
Share Swap Ratio: The share swap ratio was fixed at 1:4.04 for Andhra Bank and
1:3.23 for Corporation Bank, meaning that shareholders of Andhra Bank and
Corporation Bank would receive 4.04 and 3.23 shares of Union Bank of India,
respectively, for every share they held.
Financial Considerations
Capital Infusion: The Government of India infused {17,200 crore into Union Bank
of India to support the merger.
Combined Entity: The merged entity had a combined business of over {14.5 lakh
crore, with a network of over 9,500 branches and 12,000 ATMs.
Cost Savings: The merger was expected to result in cost savings of over {2,500
crore in the first year, mainly due to the rationalization of branches and
employees.

Integration Plan
Integration Timeline: The integration process was expected to be completed
within 12-18 months.
Branch Rationalization: The merged entity planned to rationalize its branch
network, closing or merging redundant branches.
Employee Integration: The bank planned to integrate employees from the three
banks, with a focus on re-skilling and re-deploying employees.

Technology Integration
Core Banking System: The merged entity planned to adopt a single core banking
system, with Union Bank of India's system being the base platform.
Digital Channels: The bank planned to integrate its digital channels, including
mobile banking, internet banking, and ATMs.

Regulatory Approvals
RBI Approval: The merger received approval from the Reserve Bank of India
(RBI).
SEBI Approval: The merger also received approval from the Securities and
Exchange Board of India (SEBI).

Benefits
The merger created one of the largest public sector banks in India, with a
significant increase in scale and reach.
The merger was expected to result in improved efficiency, with cost savings and
better resource allocation.
The merged entity planned to offer a wider range of products and services, with
improved customer experience and convenience.
The customers got the benefit of wider access to branches, ATMs, digital services
and credit facilities and also now in a much stronger position as a bank.
Now the Union Bank offered a wide range of products and services to more than
120 million customers across its over 9,500 branches and more than 13,500
ATMs.
In order to minimize disruption , the account numbers , IFSC codes, debit-credit
cards and internet-mobile banking portals and login credentials remained the
same.
 Merger of Punjab National Bank, Oriental Bank of
Commerce and United Bank of India
~ Nishant Kumar (BMS/22/74)

The government has decided to Merger three banks – PNB, Oriental Bank of
Commerce and United Bank of India — to reduce the amount of capital it needs
to put into these banks and help clean their balance sheets- The three merged
state-owned banks will the third-largest lender after State Bank of India and
HDFC Bank. The name of the merged entity and the share-swap ratio will be
decided soon. Bank unions, however, were quick to oppose the merger.
While Oriental Bank of Commerce has been placed under the prompt corrective
action framework by Reserve Bank of India with restriction on lending, United
Bank of India is among the only two lenders to have reported a profit in 2017-18.
As a percentage of total assets, United Bank of India has the highest net non-
performing assets at 1 1.04% while Oriental Bank of Commerce has 4.10% and
PNB 5.4%.
United Bank of India focuses on the business growth and profitability, while gives
due importance on risk management in professional environment Currently
United Bank of India has more than 54,536 crores of deposits as well as 35,727
crores of gross advances. Its head office is located in Kolkata, with 36 Regional
Offices and 2054 Branch Offices
Punjab National Bank (PNB) is a Financial and Banking service bank owned by
Government of India. It is in New Delhi, India. The bank was established in 1894.
As of June 2019, the bank has more than 115 million clients, 7,036 branches and
8,906 ATMs.
Oriental bank of commerce is an Indian public sector bank. Headquartered at
Gurgaon, Haryana has 2390 branches and 2625 ATMs all over India. Rai Bahadur
Lala Sohan Lal the main Chairman of the Bank, established OBC in 1943 in
Lahore. Within four years of its existence, OBC needed to confront Partition.

Merger
• In merger, one bank gets merged with the other losing its own identity by way
of share to increase Market Share
• Economies of scale of non-profitable bank increases Profit for Research and
development
• Benefits on account of tax shields like carried forward losses or unclaimed
depreciation
• Reduction of competition and financial risk
The Merging of Punjab National Bank, United Bank of India and Oriental Bank of
Commerce came into effect from April 1 , 2020. There will be no retrenchment of
employees due to the merger Oriental Bank of Commerce, United Bank of India
with Punjab National Bank: SS Mallikarjuna Rao, MD & CEO, Punjab National
Bank.
The merger will create the second largest nationalized bank of the country —
both in terms of business and branch network. The synergy from the
amalgamation will create a globally competitive, next generation bank, PNB 2.0,
the bank had said in a release and added that all customers, including depositors,
will be treated as PNB customers.
In August 20, finance minister Nirmala Sitharaman had announced the
consolidation of 10 lenders into four bigger banks. PNB, Oriental Bank of
Commerce (OBC) and United Bank of India (UBI) will be merged to form the
second largest state-run bank in the country, with a business of < 17.95 trillion
(loans plus deposits) and will be at least 1.5 times that of PNB.
Benefits derived from Merger
a) Better corporate governance-
b) Increase in the network / branches. (Bank of Madura/ ICICI)
c) Increase in customer base. (Bank of America / Fleet Boston)
d) Reduction in NPA (Nedungadi Bank/ Punjab National Bank)
e) Compliance with statutory requirement (Global Trust Bank/ Oriental Bank of
Commerce)
f) Fulfilling more responsibility towards society. (Bank Of Madura / ICICI)
g) Improved financial position. (Global Trust Bank/ Oriental Bank Ot Commerce)

Changes due to merger

a) Change in management
b) New ways of providing services to customers. (e-payment-railway tickets)
c) Change in debt recovery policy.

Conclusion
The merger of UBI and OBC into PNB will lead to the creation of the country's
second largest bank after State Bank of India. Both in terms of business and
branch network, the three banks collectively had a business of Rs.18 lakh crores
at the end of March that originated through 11,437 branches amongst them. As
a result of all this the merged bank will be able to operate more efficiently and
serve more customers with better services.
The concept of merger and acquisition can also be a risky process which has to
be adopted, as it may bring various, problems to the banks in terms of the
management, it working etc.