Download - National Conference Value Creations
Pavan Kumar VijayChairman, M&A Council, ASSOCHAM
Managing Director , Corporate Professionals Capital Pvt. Ltd.
National Conference on Value Creation through Mergers &
Acquisition
M&A refers to reorganizing the legal,
ownership, operational, or other structures
of companies for making it more profitable,
or better organized for its present and future
needs.
Why M&A?
Restructuring in India
- Past
- Present
- Future
Recap of
M&A
Phase I - Consolidation
Licensing in one company
Co. A Ltd.
Steel Cement Food
Float another company
Focus on all the businesses in the group
Co. A Ltd.
Auto Parts Steel Textiles
Phase II – Hiving off non-core business
Co. A Ltd.
Steel Cement Food
Non –Core business
Cement
Food
Hive off
Focus only on Core business of the Company i.e. Steel
Phase III - Acquisition
Co. A Ltd.
Steel
Co. X Ltd.
Co. Y Ltd.
Co. Z Ltd.
Steel Unit
Steel Unit
Steel Unit
Focus on to strengthen its Core business area by acquisition
Makeover of
M&A
“The only certainty in our modern world is CHANGE.
The ability to survive and flourish depends on our
flexibility and the willingness to constantly adapt to a
changing world”
Rationale of M&A at present
Backward and Forward Integration
Unlocking the Value
Restructuring of Balance Sheet
Geographical Expansion - Cross Border Acquisition
Primary Drivers in M&A
Primary Obstacles in M&A..
M&A Scenario In India During Last 12 Months
Top 10 ACTIVE SECTORSSector Name Deal Value ($ mn) No. of Deals
Energy 25,135 29
Telecommunication Services 7,053 16
Materials 6,314 72
Pharmaceuticals, Biotechnology & Life Sciences
5,512 52
Capital Goods 2,520 90
Software & Services 2,093 113
Health Care Equipment & Services
1,730 24
Utilities 1,681 15
Banks 1,512 7
Consumer Services 1,289 34
Total 54,839 452
Regulatory environment In India for M&A
Future of
M&A in India
New legal framework
Changing Values
Old Values
The Company is targeted to achieve the multiple objectives by itself
The Company wants to fulfils the demands of multiple stakeholders
Global growth of the Company
New Values
The main purpose of the Company is to maximise its shareholder value
Increasing their own capacity through acquiring a set up business
Selective market leadership i.e. To be a master in a single product or service by focusing on their core business through mergers and acquisitions of the same business
Focus on overseas acquisition.
Future M&A focus
Alternative strategies
Business proposition
Participation strategy
Offering strategy
Operating strategy
Pricing strategy
How the business will achieve a profitable strategic position (in terms of market economics and competitive position)
What product market segments to target for continued participation, entry or exit
Whether and how to differentiate (customer perspective)
Whether and how to differentiate (operating perspective)
How to price for improved market economics or competitive position (or both)
Thank YouPavan Kumar Vijay
Chairman, M&A Council, ASSOCHAMManaging Director, Corporate Professionals Capital Pvt. Ltd.