RIL AND RPL MERGER CASE STUDY

RIL AND RPL MERGER CASE STUDY

The test for difference of mean shows non significant difference in the debt equity ratio of two merger companies i. An acquisition, alternately, is aimed at gaining a controlling interest in the share capital of the acquired company. Mergers result in the combination of two or more companies into one, wherein merging entities lose their identities. While any swap ratio of more than 20x would be beneficial for RIL shareholders. Merged entity can fuel India for months. Get instant notifications from Economic Times Allow Not now. The response from the market was overwhelming and the issue was oversubscribed by over 50 times.

A firm can achieve growth both internally and externally. Following the demerger of the Reliance empire in June , the Mukesh Ambani-owned group hit the capital markets in April with a public offering from RPL. The difference was that the issue in was at a premium of Rs 50 without a debenture component attached to it. Also the average return on Net worth for the same company before merger was Due to the existence of strict government regulations, Indian companies were forced to go to new areas where capabilities are difficult to develop in the short run.

Due to the existence of strict government regulations, Indian companies were forced to go to new areas where capabilities are difficult to develop in the short run. Generally, the company that survives is the buyer which retains its identity and the seller company is extinguished.

RIL-RPL merger: Who benefits?

Fill in your details: The test for difference of mean was applied to check whether the difference in the pre merger and post xtudy was significant or not.

The decline might have been caused by the high annd during merger or because of writing off the losses of RPL. 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.

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ril and rpl merger case study

Thus, the proposed merger would help RIL utilise this Cash flows in its other business verticals in a fruitful manner. Objectives of the Study: He sold his holding in However, the decrease became insignificant after controlling for the performance of the control sample of peer companies.

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.

Lande, “Efficiency Considerations in Merger Enforcement.

ril and rpl merger case study

Merger ratio favours RPL shareholders: Log In Sign Up. 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 The present study is an attempt to find out the difference in post merger financial performance compared with pre merger in terms of profitability and generating more value than the separate firms, resulting in consolidation, refocusing and restructuring of the industry with a motive of faster mechanism.

In the process of takeover, the acquiring company decides the maximum price that is to be offered to the acquired and hence takes lesser time in completing a transaction than in mergers, provided the top management of the acquired company is co-operative. After concluding the results of this study, it is found appropriate to put the following suggestions: The story, he adds, was the establishment of a world-class refinery, which could process any form of crude.

In mergers the swap ratio is determined based on the intrinsic value of the respective companies, which is in turn decided based on various parameters, ie.

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RIL-RPL merger complete

The test for difference of mean shows non significant difference in the debt equity ratio of two merger companies i. Companies intensely working in competitive business environment have to change fast as per the evolving dynamics in their industry of operation. However, an exchange of shares takes place between the entities involved in such process.

It’ll just take a moment. It seems that the company has resorted to realizing losses. The above position has graphically been presented as below: Not all shareholders waited for the announcement. 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.

The above Table shows the position of Reliance Industries Ltd.

RIL-RPL merger: Who benefits?

Choose your reason below and click on the Report button. While Mr Choksey did not recall how much he invested in that public xtudy, the shares that came his way are still with him.

ril and rpl merger case study

Following the demerger of the Reliance empire in Junethe Mukesh Ambani-owned group hit the capital markets in April with a public offering from RPL. The declining interest coverage ratio of the acquirer company RIL from The researchers have selected a convenient sample of 01 company. This was to create an export-oriented refinery at An.