This Presentation shows the example of mergr, aquistion and alliance of companies

1. Mergers, Acquisition &
Strategic Alliance
Prepared By:
Bhavin Agrawal(02)
Nikita Balar(04)
Malvi Bhatt(08)
Ishani Dave (14)
Nitin Madhvi (28)
Kushal Mehta (31)

2. What is Merger
• Merger means the combination of two or
more companies in creation of a new entity.

3. Tech Mahindra and Satyam merger

4. Tech Mahindra and Satyam merger
• Satyam Computer Services Limited was an
Indian IT services company based in
Hyderabad, India.
• It offered a range of services, including
software development, system maintenance,
packaged software integration and
engineering design services.
• It subsequently merged within Tech Mahindra
on 24 June 2013.

5. Tech Mahindra and Satyam merger
• Tech Mahindra
– Diversification
– Broadens its customer base
– Stronger merged entity
• Satyam
– Financial Support
– Relief to shareholder
– Management

6. Tech Mahindra and Satyam merger
• Terms of transaction: Tech Mahindra had to
pay Rs. 1757 crore for 31% at Rs.58 per share
whereas for 51% stake the company had to
pay Rs.2890 crore.
– Rs.700 crore - internal
– Rs.2190 crore - debt

7. Acquisition
• A corporate action in which a company buys most
of the target company's ownership stakes in
order to assume control of the target firm.
• Acquisitions are often made as part of a
company's growth strategy whereby it is more
beneficial to take over an existing firm's
operations and niche compared to expanding on
its own.
• Acquisitions are often paid in cash, the acquiring
company's stock or a combination of both.

8. Tata and Jaguar
Jaguar Land Rover (JLR):
• Jaguar Cars bought by Ford in 1989
• Land Rover bought by Ford from BMW for $1.4bn in
1989
• A difficult relationship between the UK firm and its US
owners
• Jaguar fell into heavy losses whilst owned by Ford
(reaching up to $600million per year)
• However, Ford invested heavily in new model
development
http://googleweblight.com/?lite_url=http://beta.tutor2u.net/business/blog/6-essential-ma-cases-tata-
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9. Tata Group:
• One of India’s largest private conglomerates -
used to investing in the UK
• Bought Tetley Tea in 2000
• Bought Corus Steel - a big supplier to JLR - in
2007
• Tata Motors - was already India’s third largest car-
maker, but struggling with a poor image and
hampered by rising raw material costs

10. The Deal
• Ford sells JLR to Tata for in March 2008 just over £1bn - just a few
months before a collapse in global demand in the international car
market Tata financed the takeover with $3bn of new long-term
loans
• The price paid by Tata was approximately half of what Ford paid to
buy Jaguar and Land Rover.; + Ford had continued to incur heavy
losses in Jaguar as it failed to turn the business around.
• The deal took over a year to agree - which may have helped with
the post-merger integration. Tata recognised that it would continue
to need support from Ford who are a main supplier of car
components to the two brands.
• No significant change proposed to the businesses by Tata. They
claimed that staff, trade unions and the UK government had been
kept informed about the proposed takeover and supported the
move.
• The deal has been endorsed by trade unions, which secured a
commitment from Tata to continue with JLR’s production plans until
the end of 2011. This includes development of new models.

11. Benefits
• Acquiring JLR would provide significant
potential for revenue synergies, including
giving Tata greater international distribution,
broader product range and better customer
service skills
• Tata gains access to world-class engineering
capability
• Strengthens relationship between Tata’s steel
and motoring businesses

12. Strategic Alliance
• A strategic alliance is an agreement between
two or more parties to share resources,
capabilities and internal assets while
remaining independent organizations.
• It occurs when two or more organizations join
together to pursue mutual benefits.

13. Coca-Cola and McDonald’s
• McDonald’s and Coca-Cola alliance is a big
success, making the two companies what they
are today.
• McDonald’s is now the world’s leading global
food service retailer with
– more than 35000 local restaurants
– serving nearly 70 million people
– more than 100 countries
http://strategic-partnering.net/case-3-coca-cola-mcdonalds/

14. • While Coca-Cola is the world’s largest beverage
company owning and licensing around
– 1.9 billion beverage servings worldwide every day
– In more than 200 countries
• Customers are accustomed to enjoying a meal
with a coke inside all along, which result in that
the soft drink becoming a key revenue stream,
covering about five percent of McDonald’s
revenue.
• Moreover, the top management teams from both
sides have been very careful about partnering
relationship since the handshake between the
two top executives in 1955.

15. • McDonald’s partnered with Coca-Cola in 1955 and it is in
continuation.
• Despite the lack of paper contract, there is considerable
contact between the two companies at board level.
• McDonald’s shared the very exact destination, expansion
first across the US, then around the world with Coca-
Cola.
• As the result, they managed to create and deliver
excellent transformational value for both sides, mainly
focusing on
– Integrated supply chain
– Enabling rapid entry
– Large-scale expansion into new geographies.

16. Benefits
1) McDonald’s and Coca-Cola shared a common
mission and vision to expand globally
2) The know-how and expertise from Coca-Cola
benefits the product development of
McDonald’s.
3) The unique supply chain co-operated by both
Coca-Cola and McDonald’s creates added values.
4) Advertising
• McDonald’s and Coca-Cola have stood by each other
and worked countless campaigns globally over
years.