The business industry witnessed a lot of major happenings in 2017. Right from Vishal Sikka’s resignation to various mergers and acquisitions. The mergers and acquisitions play a major role on the activities of the organisations. However, the impact of mergers and acquisitions varies from entity to entity. The impact of mergers and acquisitions also depends on the structure of the deal.
Acquisitions and mergers are strategic moves by companies foreseeing better growth in business. Two companies merge primarily to achieve the monopoly over the industry. The Indian economy witnessed some major mergers and acquisitions in 2017.
In the initial phase, Vodafone owns the major stake in the combined entity with 45.1% stake after which it will transfer 4.9 percent stake to Aditya Birla Group in exchange. Consequently, Aditya Birla Group will own 26 percent stake with an allowance to buy shares from Vodafone under stipulated agreement.
Airtel’s merger with Telenor India will give initial thrust to the company in the fight against Reliance Jio and Vodafone-Idea. The merger recently got approval from Competition Commission of India (CCI) and Securities & Exchange Board of India (SEBI).
Axis Bank’s acquisition of FreeCharge
Axis Bank acquired Accelyst Solutions Private Limited and Freecharge Payment Technologies Private Limited for $60 million. The acquisition will pave a way for its foray into proliferating digitalisation of monetary transactions.
Flipkart’s acquisition of eBay India
In April 2017, Indian e-commerce giant Flipkart acquired the Indian wing of eBay, which infused $500 million into Flipkart as well as sold its Indian operations unit for an exchange of equity stake in Flipkart.
Google’s acquisition of Halli Labs
Google acquired Halli Labs, a 4-month old startup for an undisclosed amount in June 2017. The company joined Next Billion Users team at Google with its CEO becoming Director of Engineering. The acquisition is a testimony to how big companies look beyond horizons to acquire talent.
Impacts on Employees
Mergers and acquisitions may have great economic impact on the employees of the organisation. Some of the evident impacts that can be are:
The risk of layoffs after any merger or acquisition is higher.
Employees may also suffer emotionally due to the changes in the operating environment and business procedures.
Sudden adaptations might become a hindrance at workplace if the employee is not accommodative enough.