Mergers & Acquisitions by Vinod Keni at #TiEInstitute Jul 2013
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Mergers & Acquisitions by Vinod Keni at #TiEInstitute Jul 2013

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This deck was presented by Vinod Keni (Avishkar Ventures/ Intellecap) at the #TiEInstitute knowledge Series session for Growth stage entrepreneurs on managing finance led growth by. This is one of ...

This deck was presented by Vinod Keni (Avishkar Ventures/ Intellecap) at the #TiEInstitute knowledge Series session for Growth stage entrepreneurs on managing finance led growth by. This is one of the three modules covered by Vinod at this session.

Presented in July 2013

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Mergers & Acquisitions by Vinod Keni at #TiEInstitute Jul 2013 Presentation Transcript

  • 1. 1 Mergers & Acquisition
  • 2. MERGERS & ACQUISITIONS
  • 3. Mission Objectives External Analysis Internal Analysis Strategic Choice Strategy Implementation Competitive Advantage THE STRATEGIC MANAGEMENT PROCESS Corporate Level Strategy Which Businesses to Enter? • Vertical Integration • Diversification • Strategic Alliances Mode of Entry? • Mergers & Acquisitions
  • 4. MERGERS & ACQUISITIONS DEFINED Mergers Acquisitions • two firms are combined on a relatively co-equal basis • one firm buys another firm • the words are often used interchangeably even though they mean something very different • merger sounds more amicable, less threatening
  • 5. DO MERGERS AND ACQUISITIONS CREATE VALUE? The Logic Unrelated M&A Activity • there would be no expectation of value creation due to the lack of synergies between businesses • there might be value creation due to efficiencies from an internal capital market • there might be value creation due to the exploitation of a conglomerate discount • a corporate raider who buys and restructures firms
  • 6. MERGERS & ACQUISITIONS DEFINED Types of M&A Activity FTC Categories Vertical Horizontal Product Extension Market Extension Conglomerate » suppliers or customers » competitors » complementary products » complementary markets » everything else Related Unrelated
  • 7. IMPLEMENTATION ISSUES Cultural Differences • high levels of integration require greater cultural blending • cultural blending may be a matter of: • combining elements of both cultures • essentially replacing one culture with the other • integration may be very costly, often unanticipated • the ability to integrate efficiently may be a source of competitive advantage
  • 8. SUMMARY M&A activity is a mode of entry for vertical integration and diversification strategies M&A activity can create economic value at announcement, but target firms usually capture that value A firm’s M&A strategy should satisfy the logic of corporate level strategy M&A activity can create value over the long term for the acquiring firm
  • 9. 9 Vinod Keni vkeni@aquariangroup.com +91-9845414179 Contact