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VALUE CREATION THROUGH M&A :
CROSS BORDER ACQUISITIONS
1
ASSOCHAM - 3rd National Conference on “Value Creation through Mer...
TRENDS OF OUTBOUND M&A FROM INDIA
01
OUTBOUND M&A
fast becoming
a significant
source of
cross border
investment
India expanding abroad
direct access
to newer a...
INDIA OUTBOUND M&A TREND - SECTORS
44
Manufacturing, Financial/Insurance/Business Services and
Mining/Agriculture have bee...
Manufacturing
27%
Financial,
Insurance &
Business
Services*
23%
Agriculture &
Mining
21%
Transport,
Storage &
Communicatio...
DRIVERS BEHIND CROSS BORDER DEALS
02
FACTORS DRIVING CROSS BORDER M&A
77
FACTORS DRIVING CROSS BORDER M&A
88
FACTORS DRIVING CROSS BORDER M&A
99
FACTORS DRIVING CROSS BORDER M&A
1010
FACTORS DRIVING CROSS BORDER M&A
1111
FACTORS DRIVING CROSS BORDER M&A
1212
FACTORS DRIVING CROSS BORDER M&A
1313
THE INDIAN ENVIRONMENT FACTORS FOR
CROSS BORDER ACQUISITIONS
03
FACTORS DRIVING CROSS BORDER M&A
• Access to
financing and
capital
• policy and
regulatory
obstacles
• stable political
en...
CHARACTERISTICS OF INDIAN
ACQUISITIONS OVERSEAS
04
CHARACTERISTICS OF INDIAN ACQUISITIONS OVERSEAS
Strategic
Acquisitions
Deal Size
Targeting
developed
economies
Seizing
Opp...
WAY FORWARD FOR OUTBOUND
CROSS BORDER M&A
05
PROSPECT OF INDIA’S OUT-BOUND CROSS BORDER M&A
AND KEY FACTORS OF SUCCESS
Organisational
structure /
Strategic
approach to...
FLEXIBLE ORGANISATION AND COMPREHENSIVE DUE
DILIGENCE ARE CRITICAL FACTORS FOR SUCCESSFUL
CROSS BORDER DEALS
Experience in...
STRATEGIC APPROACH FOR LOCATION DECISIONS FOR
CROSS BORDER DEALS
Coping with country risks
Pre-integration planning
Dealin...
COMMUNICATION IS EVEN MORE CRITICAL THAN FOR
DOMESTIC DEALS
Externally
with
customers,
suppliers and
partners
Internally w...
UNDERSTANDING OF DIFFERENCES AND LOCAL
ENVIRONMENT IS CRITICAL
23
POST DEAL INTEGRATION IS CRITICAL
Integration
Post deal
Operations
24
Mazars is present in 5 continents.
www.mazars.co.in
25
Our offices:
Bengaluru
No 102, Gangadhara Chetty Road
Near Ulsoor L...
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Value creation through M&A : Cross border acquisitions (Mazars Presentation at Assocham conference) (New Delhi, India - 25-03-2015)

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Assocham Conference - New Delhi, India : Value creation through M&A : cross border acquisitions / Mazars Presentation at Assocham conference 25-03-2015 (Nicolas Ribollet)

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Value creation through M&A : Cross border acquisitions (Mazars Presentation at Assocham conference) (New Delhi, India - 25-03-2015)

  1. 1. VALUE CREATION THROUGH M&A : CROSS BORDER ACQUISITIONS 1 ASSOCHAM - 3rd National Conference on “Value Creation through Mergers & Acquisitions” Hotel Shangri-La, New Delhi, 25 March 2015
  2. 2. TRENDS OF OUTBOUND M&A FROM INDIA 01
  3. 3. OUTBOUND M&A fast becoming a significant source of cross border investment India expanding abroad direct access to newer and more extensive markets and better technologies Global Reach 33
  4. 4. INDIA OUTBOUND M&A TREND - SECTORS 44 Manufacturing, Financial/Insurance/Business Services and Mining/Agriculture have been Dominant industries in India’s outbound M&A activities in recent years. * Includes Investments in Real Estate until December 2012 Source: RBI database on Overseas Investments Breakdown of India’s cross-border M&A activity by industry group (in USD millions) 2011-2014
  5. 5. Manufacturing 27% Financial, Insurance & Business Services* 23% Agriculture & Mining 21% Transport, Storage & Communication Services 11% Other sectors 18% INDIA OUTBOUND M&A TREND - SECTORS 55 Manufacturing, Financial/Insurance/Business Services and Mining/Agriculture have been Dominant industries in India’s outbound M&A activities in recent years. * Includes Investments in Real Estate until December 2012 Source: RBI database on Overseas Investments Breakdown of India’s cross-border M&A activity by industry group (in USD millions) Total 2011-2014
  6. 6. DRIVERS BEHIND CROSS BORDER DEALS 02
  7. 7. FACTORS DRIVING CROSS BORDER M&A 77
  8. 8. FACTORS DRIVING CROSS BORDER M&A 88
  9. 9. FACTORS DRIVING CROSS BORDER M&A 99
  10. 10. FACTORS DRIVING CROSS BORDER M&A 1010
  11. 11. FACTORS DRIVING CROSS BORDER M&A 1111
  12. 12. FACTORS DRIVING CROSS BORDER M&A 1212
  13. 13. FACTORS DRIVING CROSS BORDER M&A 1313
  14. 14. THE INDIAN ENVIRONMENT FACTORS FOR CROSS BORDER ACQUISITIONS 03
  15. 15. FACTORS DRIVING CROSS BORDER M&A • Access to financing and capital • policy and regulatory obstacles • stable political environment • The new Act removed some barriers to international mergers • norms for foreign investment by Indian corporates Liberal RBI Regulatory Policy Amendment in Companies Act, 2013. Access to Financing and capital Stable political environment 1515
  16. 16. CHARACTERISTICS OF INDIAN ACQUISITIONS OVERSEAS 04
  17. 17. CHARACTERISTICS OF INDIAN ACQUISITIONS OVERSEAS Strategic Acquisitions Deal Size Targeting developed economies Seizing Opportunities 17
  18. 18. WAY FORWARD FOR OUTBOUND CROSS BORDER M&A 05
  19. 19. PROSPECT OF INDIA’S OUT-BOUND CROSS BORDER M&A AND KEY FACTORS OF SUCCESS Organisational structure / Strategic approach to location decisions Comprehensive due diligence Leadership’s commitment and communication Post-deal integration 19
  20. 20. FLEXIBLE ORGANISATION AND COMPREHENSIVE DUE DILIGENCE ARE CRITICAL FACTORS FOR SUCCESSFUL CROSS BORDER DEALS Experience in the industry Expertise in different areas Site visit Negotiation skills in international context Time Familiar with the strategic and financial rationale behind the acquisition Team with international experience and training Clear rules of engagement Tools adapted to the international environment Healthy flow of information MAKE SURE THAT THERE IS AN EFFECTIVE FLEXIBLE STRUCTURE AND A STRONG DUE DILIGENCE TEAM IN PLACE TO PERFORM CROSS BORDER M&A
  21. 21. STRATEGIC APPROACH FOR LOCATION DECISIONS FOR CROSS BORDER DEALS Coping with country risks Pre-integration planning Dealing with political sensitivities or historical tensions Learning from previous deals 21
  22. 22. COMMUNICATION IS EVEN MORE CRITICAL THAN FOR DOMESTIC DEALS Externally with customers, suppliers and partners Internally with employees Externally with regulators, shareholders, and competitors With other stakeholders 22
  23. 23. UNDERSTANDING OF DIFFERENCES AND LOCAL ENVIRONMENT IS CRITICAL 23
  24. 24. POST DEAL INTEGRATION IS CRITICAL Integration Post deal Operations 24
  25. 25. Mazars is present in 5 continents. www.mazars.co.in 25 Our offices: Bengaluru No 102, Gangadhara Chetty Road Near Ulsoor Lake Bangaluru 560042 Tel: +91 80 2554 9666 Delhi/NCR Plot No. 421, IInd Floor Udyog Vihar , Phase IV Gurgaon 122016 Tel: +91 124 481 4444 Mumbai Army & Navy Building 148 – MG Road Mumbai 400001 Tel: +91 22 6158 7200 Pune III Floor, Pro 1 Business Centre Plot no 34+35, Senapati Bapat Road Pune 411016 Tel: +91 20 2565 3365 CONTACT: Mazars Nicolas Ribollet Email : nicolas.ribollet@mazars.in

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