 Hi, students. We are discussing the topic of cross-border alliances in which we are discussing mergers and acquisitions. And in this topic, we are going to talk about different phases of mergers and acquisitions. And in this topic, we will be defining each phase. Usually, the mergers and acquisitions, they go through the integration of these firms. It goes through, usually, four phases. But as I have already once discussed as well, that these models or these classifications, they are depictions of reality which exist in various different forms. We make these classifications so that we can understand, in a particular situation, how a particular set of events may occur. So, we want to predict that when mergers and acquisitions happen, what stages can happen to them? It is not necessary that these are the four stages whose pattern is the same. But you get a basic orientation that you can achieve successful mergers and acquisitions if you have a successful merger or acquisition. OK, so there are four phases in this model. First phase is pre-merger and acquisition phase. The second is due diligence phase. The third one is integration planning phase. And fourth one is implementation phase. Now, it would be quite clear to you from the nomenclature of these phases what would be happening in each of these phases. But let's just elaborate so that you are clear what are these four phases relating to. All right, so the pre-merger and acquisition phase is the phase in which the merger or acquisition has not taken place. There has not been any formal process of that activity. It is pre-merger and acquisition phase in which both the companies, they would be looking for prospective partners. They would be analyzing whether to go for a merger or an acquisition or another mode of cross-border alliance. It would be a phase in which negotiation and options are being tested. So it includes screening of alternative partners based on an analysis of their strengths and weaknesses. So it's basically a phase of matchmaking in which two different companies, they try to make a match between each other, analyze the strengths and weaknesses, and try to see whether that fits with the strengths and weaknesses of their own company and whether that would be complementing the activities of their company or not. So screening of alternative partners is one of the major activity of this pre-merger and acquisition phase. Then the second phase is due diligence phase. That is when the match is actually made and the two companies are engaged to be wedded together. So it focuses more in-depth on analyzing the potential benefits of the merger. So the match is made, the companies have identified that, OK, this is the option that we want to go for. And then the actual task of integrating, the actual task of merging together, that is looked at that, OK, how is it going to happen, whether it is going to be a merger, how they are going to retain the legal entity, what is going to be the integration strategy. And particularly, at this stage, at the due diligence stage, the companies would be concerned about is that what is going to be the product-market combinations, what type of product is going to be offered to what kind of market and analyzing product-market combination. Then the tax regulations, because many times mergers and acquisitions, they take place so that the acquiring firms or the merging firms, they can take benefit of tax, tax rebates which are available in a particular location or in a particular country. So tax regulations, how that is going to affect is not that you are working together and doing it in a particular legal way, then you have to pay for double tax, you have to pay for your country, you have to pay for a new place, so tax regulations. And that has a huge impact on actually deciding where do you go for forming your new organization. Then the third thing is compatibility of HR, how the two types of cultures they are going to be working together. So if you try to merge American culture with Japanese culture, it's going to be totally probably a disaster because it's going to be very difficult for the two cultures to merge together. So, but there are obviously there are examples of American companies working in Japan and Japanese companies working in America, but definitely there are compatibility of HR issues. And then definitely there are going to be cultural issues, you would be concerned about merging the cultures of the two entities and whether the culture is very much different or similar to the two companies coming together. So these at this stage, at the due diligence stage, you would be concerned about these four type of issues. Obviously you will be concerned about other issues of integration, but these would be most prominent ones. Then the third phase is integration planning phase. Once you have chalked out what market you want to target, what products you want to offer, what are the tax benefits, what are the HR issues, how you're going to merge your HR together. Then is integration planning phase and you actually draw and chalk out the plans, the feasibility report of each and every aspect of your organization. So how finances are going to be managed, how product development is going to be managed, how production is going to be managed and the entire thing being chalked out, written down, documented and that is the integration planning phase. And finally, when you have made all the plans, you have the implementation phase in which all your plans, your strategies, your objectives, all of that is going to come into action and plans are put into action in the implementation phase. So these are the four phases of merger and acquisition, pre-MNA phase in which you look for alternatives, then the due diligence phase in which you actually choose an option and then you look at the different strategies to merge together, then integration planning phase in which you actually chalk out all the plans and finally the implementation phase. That is the four phases model of merger and acquisitions.