Inorganic Growth Case Study

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INTRODUCTION 1.1 Background Growth is essential for a healthy sustenance and survival of any firm in this competitive world. There are two growth routes available to any company: - organic and inorganic. The Theory of the Firm’s Growth Penrose states that the growth rate of the firm will decline with its age. Organic growth beyond certain size or age is a big challenge and hence inorganic growth gains significance. Inorganic growth means growing through mergers and acquisitions. The inorganic growth also comes with its own advantages and disadvantages. A preference for growth through mergers and acquisitions (i.e. inorganic growth) started somewhere around the late 1890s. The mergers and acquisitions activities across the globe have taken occurred in merger waves as documented in the history of mergers and acquisitions. M&A waves refer to periods of heightened merger and acquisition activity. It was found that all the merger movements occurred when the economy experienced high rate of growth. M&A activity generally coincides with the development in the economy. Extant literature (Patrick A. Gaughan, 2000) identifies five merger waves till date. The merger waves witnessed by the economy are as follows:- First wave (1897-1904). Second wave (1916-1929).…show more content…
However, the merger waves in India did not follow the same pattern. In India, M&A had a different image till 1991 because of the regulations. But the field of mergers and acquisitions in India has undergone tremendous changes after the economic reforms of 1991. The 1900s witnessed a merger wave- a merger wave that was truly international in scope. After a brief recessionary lull, the merger frenzy began once again and global megamergers began to fill the corporate landscape. This was derailed by the subprime crisis and the credit slump that came in its wake. However, the business of M&A is one which will be ever present in the corporate world. As the economy expands M&A go along with

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