02/29/12 “ 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 02/29/12 <ul><li>Backward and Forward Integration </li></ul><ul><li>Unlocking the Value </li></ul><ul><li>Restructuring of Balance Sheet </li></ul><ul><li>Geographical Expansion - Cross Border Acquisition </li></ul>
M&A Scenario In India During Last 12 Months (Aug 2010-July 2011) 02/29/12 Top 10 ACTIVE SECTORS Sector Name Deal Value ($ mn) No. of Deals Energy 14,893 34 Telecommunication Services 6,331 14 Materials 5,680 84 Pharmaceuticals, Biotechnology & Life Sciences 2,184 48 Capital Goods 3,143 95 Software & Services 3,716 107 Consumer Services 1,806 40 Utilities 1,422 10 Diversified Financials 1,028 49 Automobiles & Components 1,018 35 Total 41,221 516
Regulatory environment In India for M&A 02/29/12
New Takeover Regulations 02/29/12 <ul><li>HIGHLIGHTS </li></ul><ul><li>Increase in threshold for Open Offer from 15% to 25% </li></ul><ul><li>Increase in Offer Size from 20% to 26% </li></ul><ul><li>Abolition of Non-compete fees </li></ul><ul><li>Acquisition from other competing acquirer </li></ul><ul><li>Mandatory Recommendation on the offer by BODs </li></ul><ul><li>Voluntary offers have been introduced subject to certain conditions. </li></ul><ul><li>Existing definition of Control is retained as it is. </li></ul><ul><li>Not accepted the recommendation of TRAC to provide for delisting pursuant to an offer and proportionate acceptance. </li></ul>
Alternative strategies 02/29/12 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 You 02/29/12 Pavan Kumar Vijay Chairman, M&A Council, ASSOCHAM Managing Director, Corporate Professionals Capital Pvt. Ltd.
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