M&a
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View M&a as PDF for free.
More details
- Words: 980
- Pages: 10
The Takeovers and Mergers of Foreign Companies by Indian Multinationals An emergence of new Indian Corporate Structure
India Inc's "turnaround expert" story
Wockhardt- Acquired loss-making Wallis Laboratories of the UK in 1998 for $8 million and successfully managed to turn it around in a year's time Packaging major Essel Propack, which acquired units of the UK 's Arista Tubes and Telecon Packaging and turned it around by proper resource allocation GHCL Ltd (formerly, Gujarat Heavy Chemicals) acquired a controlling stake of 65 per cent in Romanian soda ash firm SC Bega Upsom for $19.50 millio. A month into the acquisition, GHCL managed to ramp up production by 34 per cent. Continental Engines acquired loss-making European remanufactured engines firm Vege Motors in June 2005 and turned it around within six months through better cost-control Bharat Forge has emerged the world's second-largest forging company mainly by way of Mergers and Acquisitions like Carl Dan Peddinghaus GmbH, CDP Aluminiumtechnik, Federal Forge, Imatra Kilsta, along with its wholly-owned subsidiary Scottish Stampings. And the forging major is reaping dividends as a result Mr. Lakshmi Mittal acquired Arcelor to build the strongest steel venture Mittal-Arcelor
The Tata’s Journey of M&A
Tata Tea acquired loss-making Tetley of the UK in 2000 and turned it to profits. Key- debt restructuring exercise that reduced interest costs Tata group made several significant acquisitions, such as US telecom network operator Tyco Global, Daewoo Commercial Vehicles, and Boston 's Ritz Carlton hotel Tata Motors acquired the bankrupt commercial vehicles unit of the Korean group Daewoo and made presence in international market with and enhanced product portfolio The Tata-Corus
The $11 billion deal is a marker in the ground Pure cash deal- Confidence and aggressivess Financial and integration maturity Credibility to attract more bank financing Globally competitive
An emergence of new Indian Corporate Structure
A new corporate structure with dynamic leadership of the Indian Corporates is emerging Quality management Strong earnings performance Easily to raising money in the international capital market Identify the right business opportunities and grow them further India Inc has established itself in these industries while it is yet to prove its mettle in others in global competitiveness India is emerging a vibrant player in the world of mergers and acquisitions (M&A) Third most attractive research and development centre in the world according to UNCTAD, 2005 Could anybody have imagined such a showing by Indian entrepreneurs even a few years ago?
Why M & As? Mr D. S. Brar, Ranbaxy CEO
Accessing new markets, maintaining growth momentum Acquiring visibility and international brands Buying cutting-edge technology rather than importing it, Developing new product mixes Improving operating margins and efficiencies Taking on the global competition
The Changing scenario
Share of global M&As by MNCs from developing and transition countries
1987- 4% 2005- 13%
Share in Greenfield and expansion projects exceeded 15 per cent in 2005 Most important benefit is increased competitiveness Strengthens the arms of local companies and of the MNCs to survive in a competitive milieu More investment abroad implies more the benefits to the home economy Eyebrows have been raised over the rapid growth in India 's investments abroad, but that should be no reason to curb them as the benefits they bring to domestic industry are many and significant
Merger and Acquisition news
The Apollo Group of Hospitals is now in pursuit of a UK-based hospital chain in partnership with private equity players Birlas hit the M&A board Hindalco's announcement of the intention to acquire Novelis, a US-based manufacturer of downstream aluminium products with facilities spanning North America , is a reconfirmation of Indian Inc's resolve to foray abroad aggressively UB Group headed by Dr. Vijay Mallya is keen on taking a "re-look" at its manufacturing activities as part of the group's plan to become a global leader in spirit business. It has an aggressive plan in the spirits business. In fact, $1 billion have been earmarked for overseas acquisition
On the run
Indian companies have successfully weathered the pressures of global competition and are reaping the benefit of superior returns on their investments Sustained boom in the stock market since the mid1990s implies ability to raise resources to sport some of the healthiest balance-sheets in terms of debt capital seen anywhere among countries wedded to market economy A buoyant Indian economy translates into a higher per capita consumption of practically all primary goods be it steel, aluminium or cement Even a marginal improvement in standards of consmption should translate into huge business growth
The Ongoing Race
The acquisition boom began as a trickle with software companies picking up small information technology companies abroad Followed up by pharmaceutical and autocomponents outfits Now, a deluge with the Birlas now going the Tatas' way, making a big ticket acquisition. Proving its mettle on the global stage by "exporting" its unique value-creating management expertise Not just by zealously acquiring companies overseas but by turning them around as well
The Final Say
India 's outward FDI has touched $19 billion this calendar year, up from $9.6 billion in 2005 Since 2000, India Inc has made over 300 overseas acquisitions Strong vote of confidence in Indian management, with such companies as Tata Tea, Tata Motors, Bharat Forge, Wockhardt, Essel Propack, Continental Engines and a host of others, leveraging their recently-acquired ability to work in challenging business environment Almost 40 per cent of the top 50 companies have made at least one overseas acquisition in the past three years in varied industries Clearly, India Inc's wanderlust for newer geographies has grown and Indian companies are on a global hunting spree!
India Inc's "turnaround expert" story
Wockhardt- Acquired loss-making Wallis Laboratories of the UK in 1998 for $8 million and successfully managed to turn it around in a year's time Packaging major Essel Propack, which acquired units of the UK 's Arista Tubes and Telecon Packaging and turned it around by proper resource allocation GHCL Ltd (formerly, Gujarat Heavy Chemicals) acquired a controlling stake of 65 per cent in Romanian soda ash firm SC Bega Upsom for $19.50 millio. A month into the acquisition, GHCL managed to ramp up production by 34 per cent. Continental Engines acquired loss-making European remanufactured engines firm Vege Motors in June 2005 and turned it around within six months through better cost-control Bharat Forge has emerged the world's second-largest forging company mainly by way of Mergers and Acquisitions like Carl Dan Peddinghaus GmbH, CDP Aluminiumtechnik, Federal Forge, Imatra Kilsta, along with its wholly-owned subsidiary Scottish Stampings. And the forging major is reaping dividends as a result Mr. Lakshmi Mittal acquired Arcelor to build the strongest steel venture Mittal-Arcelor
The Tata’s Journey of M&A
Tata Tea acquired loss-making Tetley of the UK in 2000 and turned it to profits. Key- debt restructuring exercise that reduced interest costs Tata group made several significant acquisitions, such as US telecom network operator Tyco Global, Daewoo Commercial Vehicles, and Boston 's Ritz Carlton hotel Tata Motors acquired the bankrupt commercial vehicles unit of the Korean group Daewoo and made presence in international market with and enhanced product portfolio The Tata-Corus
The $11 billion deal is a marker in the ground Pure cash deal- Confidence and aggressivess Financial and integration maturity Credibility to attract more bank financing Globally competitive
An emergence of new Indian Corporate Structure
A new corporate structure with dynamic leadership of the Indian Corporates is emerging Quality management Strong earnings performance Easily to raising money in the international capital market Identify the right business opportunities and grow them further India Inc has established itself in these industries while it is yet to prove its mettle in others in global competitiveness India is emerging a vibrant player in the world of mergers and acquisitions (M&A) Third most attractive research and development centre in the world according to UNCTAD, 2005 Could anybody have imagined such a showing by Indian entrepreneurs even a few years ago?
Why M & As? Mr D. S. Brar, Ranbaxy CEO
Accessing new markets, maintaining growth momentum Acquiring visibility and international brands Buying cutting-edge technology rather than importing it, Developing new product mixes Improving operating margins and efficiencies Taking on the global competition
The Changing scenario
Share of global M&As by MNCs from developing and transition countries
1987- 4% 2005- 13%
Share in Greenfield and expansion projects exceeded 15 per cent in 2005 Most important benefit is increased competitiveness Strengthens the arms of local companies and of the MNCs to survive in a competitive milieu More investment abroad implies more the benefits to the home economy Eyebrows have been raised over the rapid growth in India 's investments abroad, but that should be no reason to curb them as the benefits they bring to domestic industry are many and significant
Merger and Acquisition news
The Apollo Group of Hospitals is now in pursuit of a UK-based hospital chain in partnership with private equity players Birlas hit the M&A board Hindalco's announcement of the intention to acquire Novelis, a US-based manufacturer of downstream aluminium products with facilities spanning North America , is a reconfirmation of Indian Inc's resolve to foray abroad aggressively UB Group headed by Dr. Vijay Mallya is keen on taking a "re-look" at its manufacturing activities as part of the group's plan to become a global leader in spirit business. It has an aggressive plan in the spirits business. In fact, $1 billion have been earmarked for overseas acquisition
On the run
Indian companies have successfully weathered the pressures of global competition and are reaping the benefit of superior returns on their investments Sustained boom in the stock market since the mid1990s implies ability to raise resources to sport some of the healthiest balance-sheets in terms of debt capital seen anywhere among countries wedded to market economy A buoyant Indian economy translates into a higher per capita consumption of practically all primary goods be it steel, aluminium or cement Even a marginal improvement in standards of consmption should translate into huge business growth
The Ongoing Race
The acquisition boom began as a trickle with software companies picking up small information technology companies abroad Followed up by pharmaceutical and autocomponents outfits Now, a deluge with the Birlas now going the Tatas' way, making a big ticket acquisition. Proving its mettle on the global stage by "exporting" its unique value-creating management expertise Not just by zealously acquiring companies overseas but by turning them around as well
The Final Say
India 's outward FDI has touched $19 billion this calendar year, up from $9.6 billion in 2005 Since 2000, India Inc has made over 300 overseas acquisitions Strong vote of confidence in Indian management, with such companies as Tata Tea, Tata Motors, Bharat Forge, Wockhardt, Essel Propack, Continental Engines and a host of others, leveraging their recently-acquired ability to work in challenging business environment Almost 40 per cent of the top 50 companies have made at least one overseas acquisition in the past three years in varied industries Clearly, India Inc's wanderlust for newer geographies has grown and Indian companies are on a global hunting spree!
