Merger Final
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- Words: 334
- Pages: 14
Presented by: Gurpreet Singh(08-MBA-06) Namrata Soodan(12-MBA-06) Sonali Raina(29-MBA-06) Sahina Sethi(24-MBA-060 Varun Abrol(37-MBA-06)
INDIAN AVIATION INDUSTRY
Domestic market: current scenario Indian 21%
Air Sahara 11%
Air Deccan 19%
Jet Airways 34%
Others 1%
Go Air 2%
SpiceJet 6%
Kingfisher Airlines 8%
Full-service carriers: 72% share (Jet Airways, Indian, Air Sahara, Kingfisher Airlines) No-frills carriers: 28% share (Air Deccan, SpiceJet, Go Air)
6
6
Corporate Strategies in M&A Why? • • • • • • • •
20
Gain market share Economies of scale Enter new markets Acquire technologies Strategic Benefit Utilisation of surplus funds Managerial Effectiveness Integrate vertically
20
Corporate Strategies in M&A Exploit market power, economies of scale & scope, and market inefficiencies Related industries - Horizontal -Jet-Sahara
Same industry/ Same market - Consolidation Suppliers -Vertical -ITC 20
Same industry/ Different market (Conglomerate) -LIC-UTI Bank
20
HOT DEALS Mittal- Arcelor SBI- GE ICICI- Sangli Bank United Breweries- Shaw Wallace Tata- Corus Jet- Sahara LIC may buy UTI Bank 20
20
Air Sahara in Jet Air Fold Deal for Rs 1450 crore, 40% less than the deal in Jan’ 2006. The merged entity will have a market share of 42% (largest domestic private ) Buyout helps Jet Air to go International. 20
20
Abstract
20
20
Chronological Events in the deal • • • • • • • • 20
JAN 19, 2006 JUNE 20, 2006 JUNE 21, 2006 JUNE 22, 2006 SEPT 22, 2006 APR 12, 2007 APR 16, 2007 APR 20, 2007 20
Did Jet Airways pay too much for Air Sahara???
20
20
To defend the dominance of Indian Skies New Players Explosive 20-25% growth for industry. But Jet’s share declined from 42% to 37% 20
20
Regaining the dominance… Three dimensions to dominance… 1.Increase in market share 2.Control over a substantial part of available airport infrastructure. 3.The only private player to fly international. 20
20
This is not a market share game ,but of infrastructure. Substantial cost reductions. Staffing issues. 20
20
Advantages Jet will get from the deal.
20
20
INDIAN AVIATION INDUSTRY
Domestic market: current scenario Indian 21%
Air Sahara 11%
Air Deccan 19%
Jet Airways 34%
Others 1%
Go Air 2%
SpiceJet 6%
Kingfisher Airlines 8%
Full-service carriers: 72% share (Jet Airways, Indian, Air Sahara, Kingfisher Airlines) No-frills carriers: 28% share (Air Deccan, SpiceJet, Go Air)
6
6
Corporate Strategies in M&A Why? • • • • • • • •
20
Gain market share Economies of scale Enter new markets Acquire technologies Strategic Benefit Utilisation of surplus funds Managerial Effectiveness Integrate vertically
20
Corporate Strategies in M&A Exploit market power, economies of scale & scope, and market inefficiencies Related industries - Horizontal -Jet-Sahara
Same industry/ Same market - Consolidation Suppliers -Vertical -ITC 20
Same industry/ Different market (Conglomerate) -LIC-UTI Bank
20
HOT DEALS Mittal- Arcelor SBI- GE ICICI- Sangli Bank United Breweries- Shaw Wallace Tata- Corus Jet- Sahara LIC may buy UTI Bank 20
20
Air Sahara in Jet Air Fold Deal for Rs 1450 crore, 40% less than the deal in Jan’ 2006. The merged entity will have a market share of 42% (largest domestic private ) Buyout helps Jet Air to go International. 20
20
Abstract
20
20
Chronological Events in the deal • • • • • • • • 20
JAN 19, 2006 JUNE 20, 2006 JUNE 21, 2006 JUNE 22, 2006 SEPT 22, 2006 APR 12, 2007 APR 16, 2007 APR 20, 2007 20
Did Jet Airways pay too much for Air Sahara???
20
20
To defend the dominance of Indian Skies New Players Explosive 20-25% growth for industry. But Jet’s share declined from 42% to 37% 20
20
Regaining the dominance… Three dimensions to dominance… 1.Increase in market share 2.Control over a substantial part of available airport infrastructure. 3.The only private player to fly international. 20
20
This is not a market share game ,but of infrastructure. Substantial cost reductions. Staffing issues. 20
20
Advantages Jet will get from the deal.
20
20
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