History of Merger and Acquisition in Nepal

Merger

A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The firms that agree to merge are roughly equal in terms of size, customers, scale of operations, etc. For this reason, the term "merger of equals" is sometimes used. Acquisitions, unlike mergers, or generally not voluntary and involve one company actively purchasing another.

Mergers are most commonly done to gain market share, reduce costs of operations, expand to new territories, unite common products, grow revenues, and increase profits—all of which should benefit the firms' shareholders. After a merger, shares of the new company are distributed to existing shareholders of both original businesses.

Types of Mergers

1. Conglomerate Merger

This is a merger between two or more companies engaged in unrelated business activities. The firms may operate in different industries or in different geographical regions. A pure conglomerate involves two firms that have nothing in common. A mixed conglomerate, on the other hand, takes place between organizations that, while operating in unrelated business activities, are actually trying to gain product or market extensions through the merger.Companies with no overlapping factors will only merge if it makes sense from a shareholder wealth perspective, that is, if the companies can create synergy.

2. Congeneric Merger

A congeneric merger is also known as a Product Extension merger. It occurs when two or more companies join together that operate in the same market or sector with overlapping factors, such as technology, marketing, production processes, and research and development (R&D). A product extension merger is achieved when a new product line from one company is added to an existing product line of the other company. When two companies become one under a product extension, they are able to gain access to a larger group of consumers and, thus, a larger market share.

3. Market Extension Merger

This type of merger occurs between companies that sell the same products but compete in different markets. Companies that engage in a market extension merger seek to gain access to a bigger market and, thus, a bigger client base.

4. Horizontal Merger

A horizontal merger occurs between companies operating in the same industry. The merger is typically part of consolidation between two or more competitors offering the same products or services. Such mergers are common in industries with fewer firms, and the goal is to create a larger business with greater market share and economies of scale since competition among fewer companies tends to be higher.

5. Vertical Merger

When two companies that produce parts or services for a product merger the union is referred to as a vertical merger. A vertical merger occurs when two companies operating at different levels within the same industry's supply chain combine their operations. Such mergers are done to increase synergies achieved through the cost reduction which results from merging with one or more supply companies.

Acquisition

An acquisition is a situation whereby one company purchases most or all of another company's shares in order to take control. An acquisition occurs when a buying company obtains more than 50% ownership in a target company. As part of the exchange, the acquiring company often purchases the target company's stock and other assets, which allows the acquiring company to make decisions regarding the newly acquired assets without the approval of the target company’s shareholders.

History of merger and Acqusition in Nepal

S No	BFIs Name before merger and Acquisition		BFIs Name after merger and Acquisition
1	Laxmi Bank	a. Hisef Finance b. Professional Diyalo Bikas Bank	Laxmi Bank
2	Nepal Bangladesh Bank	a. Nepal Bangladesh Finance b. Nepal Srilanka Merchant Finance	Nepal Bangladesh Bank
3	Narayani Finance	National Finance	Narayani National Finance
4	Himchuli Bikas Bank	Birgunj Finance	H & B Development Bank
5	Kastamandap Development Bank	Shikhar Finance	Kastamandap Development Bank
6	Infrastructure Development Bank	Swastik Merchant Finance	Infrastructure Development Bank
7	Business Development Bank	Universal Development Bank	Business Universal Development Bank
8	Annapurna Bikas Bank	Suryadarsan Finance	Suprim Development Bank
9	Butwal Finance	a. Alpine b.Everest c. CMB Finance	Synergy Finance
10	Pashupati Development Bank	Udhham Bikas Bank	Axis Development Bank
13	Vibor Bikas Bank	Bhajuratna Finance	Vibor Bikas Bank
11	Prudential Finance	Gorkha Finance	Prudential Finance
12	Diyalo Bikas Bank	Professional Bikas Bank	Professional Diyalo Bikas Bank
13	Araniko Development Bank	Surya Development Bank	Araniko Development Bank
14	Royal Merchant Banking & Finance	Rara Development Bank	Apex Development Bank
15	Prabhu Finance	a. Sambridhi Bikas Bank b. Baibhav Finance	Prabhu Development Bank
22	Manakamana Development Bank	a. Yeti Finance b. Valley Finance	Yeti Development Bank
16	Reliable Finance	a. ShubhaLaxmi Finance b. Nepal Consumers Development Bank	Reliable Development Bank
17	Reliance Finance	Lotus Finance	Reliance Lotus Finance
18	Siddhartha Finance	Imperial Finance	Siddhartha Finance
19	Civil Bank	a. Axis Development Bank b. Civil Merchant Finance c. International Leasing Finance d. Unique Finance e. Hama Merchant and Finance	Civil Bank
20	BiratLaxmi Bikas Bank	Khadbaru Development Bank	BiratLaxmi Bikas Bank
21	Lumbini Bank	NawaDurga Finance	Lumbini Bank
22	Kist Bank	a.Prabhu Bikas Bank b. Jenith Finance c. Gaurishankar Development Bank	Prabhu Bank
23	Triveni Bikas Bank	a. Public Development Bank b. Bright Development Bank	Triveni Bikas Bank
24	NDEP Development Bank	Rising Development Bank	NDEP Development Bank
25	Biswo Bikas Bank	Fewa Finance	Fewa Bikas Bank
26	Sagarmatha Merchant & Finance	Patan Finance	Sagarmatha Merchant & Finance
27	City Development Bank	Om Finance	Om Development Bank
28	Gorkha Bikas Bank	Kathmandu Finance	Gorkha Finance
29	Mega Bank	a. Paschimanchal Development Bank b. Gandaki Development Bank	Mega Bank
30	Kailash Bikas Bank	a. Metro Development Bank b. Nepal Express Finance	Kailash Bikas Bank
31	Siddhartha Development Bank	a. Ekata Bikas Bank b. Nepal Awas Finance	Siddhartha Development Bank
32	Kamana Bikas Bank	a. Kaski Finance b. Sewa Bikas Bank	Kamana Sewa Bikas Bank
33	Sunrise Bank	a. Narayani National Finance Limited b. NIDC Capital Market Limited	Sunrise Bank
34	Bank of Kathmandu	Lumbini Bank	Bank of Kathmandu
35	Vibor Bikas Bank	Society Development Bank	Vibor Society Development Bank
36	Tourism Development Bank	a. Matribhumi Bikas Bank b. Kalinchowk Development Bank	Tourism Development Bank
37	Janata Bank	a. Tiveni Development Bank b. Siddhartha Development Bank	Janata Bank
38	Om Development Bank	Manaslu Development Bank	Om Development Bank
39	Gandaki Bikas Bank	Fewa Bikas Bank	Gandaki Bikas Bank
40	Nepal Investment Bank	a. Yes Development Bank b. Jebils Finance c. City Express Finance	Nepal Investment Bank
41	Century Commercial Bank	Sagarmatha Finance	Century Commercial Bank
42	Dev Bikas Bank	a. Sajha Bikas Bank Limited b. Union Finance Limited c.Western Development Bank	Dev Bikas Bank

History of Merger and Acquisition in Nepal

S.No.	BFI Name before Merger	BFI Merged	BFI Name after Merger