The document discusses two mergers and acquisitions deals: 1) Sun Pharma's acquisition of Ranbaxy in 2014 to create the world's 5th largest specialty generic pharmaceutical company. This deal was aimed at expanding their market share and addressing regulatory issues Ranbaxy was facing. 2) Microsoft's acquisition of Nokia's mobile phone business in 2013 for $7.2 billion to strengthen its presence in the mobile device market. This deal gave Microsoft control over Nokia's hardware assets and patent portfolio.

1. “Benefits and
Advantages of
global level Mergers
and Acquisitions”
‘Global strategic management’
Presentation by,
Jithin Koshy
Nikhar Garg
Aman Gupta
Abishek Shukla
Akarsh Gupta

2. We shall see following
cases of merger ahead:-

3. What do mean by Merger
and Acquisition?
Mergers and acquisitions (M&A) is the area of corporate
finances, management and strategy dealing with
purchasing and/or joining with other companies.
• In a merger, two organizations join forces to become a
new business, usually with a new name.
• In an acquisition, one business buys a second and
generally smaller company which may be absorbed into
the parent organization or run as a subsidiary.

4. Different Types of
Mergers
• A horizontal merger - This kind of merger exists between two
companies who compete in the same industry segment.
• A vertical merger - Vertical merger is a kind in which two or
more companies in the same industry but in different fields
combine together in business.
• Co-generic mergers - Co-generic merger is a kind in which
two or more companies in association are some way or the
other related to the production processes, business markets,
or basic required technologies.
• Conglomerate Mergers - Conglomerate merger is a kind of
venture in which two or more companies belonging to different
industrial sectors combine their operations.

5. Different Types of
Acquisitions
• Friendly acquisition - Both the companies approve of the
acquisition under friendly terms.
• Reverse acquisition - A private company takes over a
public company.
• Back flip acquisition- A very rare case of acquisition in
which, the purchasing company becomes a subsidiary of
the purchased company.
• Hostile acquisition - Here, as the name suggests, the
entire process is done by force.

7. Benefits of Mergers and
Acquisitions
• Greater Value Generation - Mergers and acquisitions
generally succeed in generating cost efficiency through the
implementation of economies of scale. It is expected that the
shareholder value of a firm after mergers or acquisitions.
• Gaining Cost Efficiency - When two companies come together
by merger or acquisition, the joint company benefits in terms
of cost efficiency. As the two firms form a new and bigger
company, the production is done on a much larger scale.
• Increase in market share - An increase in market share is
one of the plausible benefits of mergers and acquisitions.
• Gain higher competitiveness - The new firm is usually more
cost-efficient and competitive as compared to its financially
weak parent organization.

8. Now we start with
Acquisition of

9. Nokia CEO Stephen Elop (left) and Microsoft CEO Steve
Balmer
shake hands at the announcement of Microsoft’s
Acquisition of Nokia for $7.2 billion.

10. History of NOKIA
While Nokia may remind most of us of only mobile phones,
the company in fact started out as a paper mill, which was
established in 1865 by mining engineer Fredrik Idestam at
the Tammerkoski Rapids in south-western Finland.

11. • For 3 decade the nokia also ventured into electricity
generation.
• In 1918, Finnish Rubber Works acquired Nokia to secure
access to the latter’s hydro-power resources, and in
1922, Finnish Cable Works was also acquired by the
newly formed conglomerate.
• In 1967, 3 company merger together and Nokia
Corporation was born.
• The newly formed company mainly focused on four
markets: paper, electronics, rubber, and cable.

12. Portfolio expansion
• In 1979, Nokia entered into a joint venture with leading
Scandinavian color TV manufacturer Salora to create
Mobira Oy, a radio telephone company.
• Nokia launched the world's first international cellular
system dubbed Nordic Mobile Telephone network, which
linked Sweden, Denmark, Norway, and Finland. This
was followed by the launch of the company’s as well as
world’s first car-phone dubbed Mobira Senator, which
weighed in at around 10 kg.

13. • In 1988, the company introduced its first compact phone
called Mobira Cityman 900.
• In 1991, world’s first GSM call was made by the then
Finnish prime minister, Harri Holkeri. Unsurprisingly, it
was made using Nokia equipment. The next year, the
company’s first hand-held GSM phone Nokia 1011 was
launched.
• BY 2000, Nokia was the world leader in the mobile
phones market.

14. Nokia Acquisition Deal
• What the business includes
Mobile Phones and Smart Devices business units as well as the
design team, operations including production facilities, sales and
marketing activities and support functions
• Human Resources transferral
Approximately 32,000 people transfer to Microsoft at closing
• Patents Included
licensing rights of Nokia’s utility patents for 10 years at an additional
1.65 bn Euros
• Total purchase price
The purchase price had two components: EUR 3.79 billion relates to
the purchase of the Devices & Services business and EUR 1.65 billion
relates to the mutual patent license agreement and future option

15. Opportunities for
Microsoft after deal
• Wider range of products
• Increase the chance of Innovation breakthrough
• Complementarity between products
• Increased costumer and company benefits

16. Benefits for Microsoft
Internal External
• Better cost structure
Vertical integration between
microsoft and nokia
• Control over technology
Being able to develop both
hardware and software with
integrated innovation
• Customer oriented
Costumers perception on
microsoft with a full range
from entertainment to
productivity
• Market opportunities
Wider set of products,
allowing microsoft to complete
for better market shares.

17. CASE 2:-

18. CADBURY HISTORY• Cadbury Is A British Multinational Confectionery.
• Started By John Cadbury In 1824 (England).
• ITS Headquartered In Uxbridge, London (UK).
• Started Producing The World Famous Dairy Milk Chocolate In
1905.
• In 1969 The Cadbury Group Merged With Schweppes.
• Taken Over By Kraft Foods On 19 Jan 2010.

19. KRAFT FOODS HISTORY
• Kraft Foods Group Is an American manufacturing and
processing company, headquartered in Chicago (USA).
• Kraft Food Company Formed In 10 Dec 1923 By Thomas
Mclnnerney.
• IT Is The World’s Second Largest Food Company After Nestle
With Presence In More Than 150 Countries.
• Its Famous Brands Is – Philadelphia Cheese, Oreo Biscuits &
Trident Gum.
• Kraft Foods Group was focused mainly on grocery products.

20. Takeover & Mergers Of
• In August 2009 Krafts Chairman Irene Rosenfeld Meets
Cadbury Chairman Roger Carr & Offers To Buy Cadburys
Shares But Carr Dismissed The Approach.
• Kraft, the deal offers a chance to expand in emerging markets
and in higher-growth sectors like gum and candy.
• Cadbury agreed to an improved takeover offer from Kraft
Foods, worth about $19 billion.
• And Finally Kraft Sign a deal to buy Cadbury for £12 Billion.

21. Reasons For The Deal
• Entering Emerging Market Through Cross border
Acquisitions. Like India, China Brazil, South Africa ETC
• Overcoming Entry Barriers In new Markets.
• Increasing Market Power.
• Breaking New Grounds By Cadbury.

22. • In india it is called MONDELEZ.
• It recently lauched in India called Cadbury choclairsgold.
• It has been loved by consumer over the year
• This versatile mix of emotion makes commercial
ingaging.

23. www.sunpharma.c
om
www.ranbaxy.com
Creating the
World’s 5th Largest
Specialty Generic Pharma
Company
Sun Pharma – Ranbaxy Merger – April 7,
2014

24. SunPharma Ranbaxy
Acquisition

25. Introduction: Pharmacy Sector
• The pharmaceutical industry develops, produces,
and markets drugs or pharmaceuticals licensed for use
as medications. Pharmaceutical companies are allowed
to deal in generic or brand medications and medical
devices.
• The Pharmaceutical industry has grown from mere
US$0.3 billion turnover in 1980 to 15 billion in 2012-
2013.
• Globally, India ranks 3rd in terms of volume of
production(10 per cent of global share) and 14th largest
by value. (1.5 per cent of global share)
• The reason for lower value share is the lowest cost of
drugs in India ranging from 5 to 50 per cent less as
compared to developed countries.

26. Sun Pharma
• Established in 1983, listed since 1994 and headquartered
in India, Sun Pharma is an international, integrated,
specialty pharmaceutical company.
• In India, the company is a leader in niche therapy areas
of psychiatry, neurology, cardiology, diabetology,
gastroenterology, orthopedics and ophthalmology.
• The company has strong skills in product development,
process chemistry, and manufacturing of complex dosage
forms and APIs.
• The 2014 acquisition of Ranbaxy will make the company
the largest pharma company in India, the largest Indian
pharma company in the US, and the 5th largest speciality
generic company globally.

27. Ranbaxy
• Ranbaxy Laboratories Limited is an Indian
multinational pharmaceutical company that was incorporated in
India in 1961. The company went public in 1973 and Japanese
pharmaceutical company Daiichi Sankyo acquired a controlling
share in 2008.
• Ranbaxy Limited is an integrated, research based, international
pharmaceutical company producing a wide range of quality,
affordable generic medicines, trusted by healthcare
professionals and patients across geographies.
• Ranbaxy serves its customers in over 150 countries and has
an expanding international portfolio of affiliates, joint ventures
and alliances, ground operations in 43 countries and
manufacturing operations in 8 countries.
• In 2011, Ranbaxy Global Consumer Health Care received the
OTC Company of the year award.

28. SunPharma + Ranbaxy=
Profile of a New Global
Leader

29. Acquisition
• Apr 06, 2014:To create world’s 5th largest specialty
generic pharma company
• No. 1 pharma company in India with leadership
position in 13 specialty segments
• No. 1 Indian pharma company in the US
• Daiichi Sankyo to become the second largest
shareholder in Sun Pharma

31. Why Ranbaxy?
• Ranbaxy has got a lot of ANDA's (Abbreviated New
Drug Application) approved for marketing in USA. Their
problem is to find an API plant because main source of
API was from Toansa. If Sun Pharma fills this gap,
Ranbaxy can begin its export to the USA. So, Sun
Pharma has got into this deal at the right time and deal
has an upside for all the shareholders.
• Sun Pharma’s managing director Dilip Shanghvi has
acquired a reputation for acquiring companies in trouble
at a good price, and then turning around their
operations

32. Why Daichi sold Ranbaxy
• Daiichi faced criticism after Ranbaxy’s plants came
under the US Food and Drug Administration’s (FDA’s)
• Ranbaxy’s inability to overcome its FDA-related
problems has put pressure on its promoters.
• With Sun Pharma acquiring Ranbaxy, Daiichi is relieved
of the burden of managing Ranbaxy’s problems. It will
hold a 9% stake in Sun Pharma, as a result of its
current stake in Ranbaxy.

33. Valuation
• Sun Pharmaceutical Industries fully acquired troubled
Ranbaxy Laboratories, in an all-stock transaction with a
total equity value of USD 3.2 billion.
• Under these agreements, Ranbaxy shareholders
received 0.8 share of Sun Pharma for each share of
Ranbaxy.
• The deal lead to 16.4% dilution in the equity capital of
Sun Pharma. This is because its total equity value is
$3.2 billion and the deal size is $4 billion
• The combined entity’s revenues were USD 4.2 billion
with EBITDA of USD 1.2 billion for the twelve month
period ended December 31, 2013.

34. Transaction Highlights
Sun Pharma to acquire Ranbaxy
• Ranbaxy shareholders to get 0.8 shares of Sun
Pharma stock for every share of Ranbaxy
• Deal size approximately US$ 4 billion.
• Daiichi Sankyo to become the second largest
shareholder in SunPharma. Strategic business
relationship to continue with SunPharma Voting
Agreements
• Daiichi Sankyo to vote in favor of transaction
(~63.5% ownership) SunPharma promoters to vote
in favor of transaction (~63.7% ownership)

35. Indemnity:
• In connection with the transaction, Daiichi Sankyo
has agreed to indemnify SunPharma and Ranbaxy
for, among other things, certain costs and
expenses that may arise from the recent subpoena
which Ranbaxy has received from the United
States Attorney for the Toansa facility.
• Conditions to close:
• Requisite approval of Sun Pharma and Ranbaxy
shareholders
• Approval of the Indian Central Government and
various other regulatory bodies

36. Advisors
• Citi and Evercore were acting as financial advisors
for the transaction to Sun Pharma. Sun Pharma’s
legal advisors are Shearman & Sterling LLP,
Crawford Bayley & Co and S. H. Bathiya &
Associates.
• Ranbaxy’s financial advisor for the transaction is
ICICI Securities and its legal advisors are Luthra &
Luthra Law Offices and Amarchand & Mangaldas
& Suresh A Shroff & Co.
• Daiichi Sankyo’s financial advisor for the
transaction is Goldman Sachs and its legal
advisors are Davis Polk & Wardwell LLP and
Amarchand & Mangaldas & Suresh A Shroff & Co.

37. Problems to be faced by
SunPharma
• The deal, has also seen Sun assume $800 million
of debt on Ranbaxy’s books, needs shareholder
and regulatory clearances.
• Ranbaxy’s all four plants have been banned by the
USDFA for violations of manufacturing norms. In
2013, the company agreed to pay USD 500 million
fine after pleading guilty to felony charges over
manufacturing and distribution of adulterated drugs
in the US.

38. Conclusion
• That was the right time for Sun Pharma to buy
Ranbaxy. Ranbaxy's problem with US Food and Drug
Administration (FDA) cannot get more intense than they
are already, things can only improve from now
onwards. There will be tremendous synergy between
the two companies when they are merged as single
entity. It will be the largest Indian generic company and
the fifth largest in the world.
• The merger will see Sun Pharma’s revenue jump by a
healthy 40% but its operating profit will rise by a
meagre 7.5%, based on pro forma 2013 financials. Its
operating profit margin will decline from 44.1% to
29.2%. Thus, the merger will have a negative effect on
its performance in the near term.

39. Bibliography
• http://www.rediff.com/business/report/benefit-of-
ranbaxy-deal-to-accrue-in-few-years-sun-
pharma/20140929.htm
• http://businesstoday.intoday.in/story/nokia
microsoftshareholders-experts/1/205526.html
• www.sunpharma.com
• www.cadbury.com
• www.moneycontrol.com
• www.kraftfoods.com