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.