Difference Between Icici Bank N Axis

Pikula (1999) observes that in merging two or more entities, the management of the companies must adhere to the Sherman Anti-trust Act which was established in 1890. This act was specifically established to prevent mergers from creating monopolies and cartels with an aim to exploit the consumers through determining prevailing market prices. If the merger results in a monopoly, it won’t be approved by the government. Employee contractual agreements must be considered before, during and after mergers. For the merger to go on seamlessly there should be shareholder approval. Initial approval by shareholders for the companies to consolidate their operations helps prevent conflicts from shareholders after the merger. Lastly, regulatory approval should be considered. The management must register the newly formed company. In addition, managers from the merging parties must consider agreements and contracts that the parties are engaging in as these will be transferred to the new company upon the merger.

These bank mergers can generate a great number of advantages. First, the economy of scale is one advantage of the merger. The advantage of the economy of scale is the cost savings associated

The financial terms of the merger have not been disclosed but transaction has been unanimously approved by the board of directors of both banks.

ICICI Bank is the second largest bank in India based on market share and total assets

The paper differs from others as it will provide insight and evaluation into which event during the merger process had the largest effect and identify whether this was the same for both firms, especially since the merger was undertaken in a tough regulatory environment which contains many “hurdles” (). The results of this paper could be attributed to other firms in the industry or, potentially, to other industries with similar regulatory structures.

This essay will report the process of this merger happened in 2014 and analyze the impact of this financial event on both parties by using relevant financial theory.

A merger or acquisition is a combination of two companies where one corporation is completely absorbed by another corporation. The less essential company loses its identity and becomes part of the more imperative corporation, which retains its identity. A merger extinguishes the merged corporation, and the surviving corporation assumes all the rights, privileges, and liabilities of the merged corporation (Gomes, 2011). A merger is not the same as a consolidation, in which two corporations lose their separate identities and unite to form a completely new

Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the population. Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth and the development of the country. Driven by the socialist ideologies and the welfare state concept, public sector banks have long been the supporters of agriculture and other priority sectors. They act as crucial channels of the government in its efforts to ensure equitable economic development.

Mergers and acquisitions represent the ultimate in change for a business. No other event is more difficult, difficult, or chaotic as a merger and acquisition. According to oxford, the term "merger" means "the combination of two commercial companies into one." the term "acquisition" refers to the acquisition of assets by a company from another company. In an acquisition, the both companies may continue to exist. The acquiring company will remain in business and the acquired business will be integrated into the acquiring company and therefore, the acquired company ceases to exist after the merger. Technology transfer to developing perspectives of multiple challenges any business. The prospects include access to new markets that were previously closed because of the cost, regulatory or indirect obstacles, the ability to beat resources such as capital, knowledge and work. Challenges come from foreign competitors entering domestic markets businesses, as well as domestic competitors reduce costs through global sourcing in offshore production moving or saving money expansion in scale in new markets. Globalization challenges the businesses to become more streamlined and efficient, while simultaneously extending the geographical scope of their activities [kraemer et al., 2002]. The transition to faster growth and elimination of the position of the third largest economy, the indian

The financial sector in India is predominantly a banking sector with commercial banks accounting for more than 60 percent of the total assets held by the financial system. India 's services sector has always served the country 's economy well, accounting for about 57 per cent of the gross domestic product. The financial services sector has been an important contributor to the country gross domestic product (GDP) accounting for nearly 6 percent share in 2014-15. The success of their financial sector is from the

Table 6: Profile of financial ratios of The ICICI Bank for three financial years post merger (in percentages)

Bank: - is an establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.

For the analysis of the share prices and also the volume traded pre and post-merger we have taken the data prior to ten days before the announcement as well as ten days post the announcement date. The data has been collected as per the data available in the stock exchange official website.

In India the Competition Act, 2002 categorically numerates, among the factors, the market shares of the persons and/or entities in a combination, both individually and as a combination. The CCI has to adjudge which other factors in addition to the market share has to be considered for the evaluation of the proposed merger.

Investment banking is a highly regulated and complex sector that can be broken down into three main principle businesses comprising of the Investment Banking Division, Trading Division and Asset Management. First of all, the investment banking division can be sub divided into two basic groups called product group and client coverage group. The primary focus of these two groups are to perform mergers and acquisitions transaction advisory and financing arrangement for clients. The two main groups in the product group are the mergers and acquisitions group and the capital markets group. In the mergers and acquisitions group, there are five main products which is the “sell side” assignment, “buy side” assignment, merger of equals joint venture, public market separation and hostile defense. The “sell side” transaction involves the sale, merger or disposition of an entire company or any of its divisions and assets. The “buy side” transaction involves the purchase of an entire company or any of its divisions and assets. The “sell side” transaction typically have the highest priority due to its higher probability of completion compared to the “buy side” transactions. Merger of equals joint ventures is the merging of two companies of roughly equal assets that have a comparable market value. This allows the two companies to form a new and stronger entity to initiate economic activity together with their shared assets. Public market separation requires reorganization such as trading