This document summarizes the merger between Kingfisher Airlines and Air Deccan in India. It discusses the key factors that led to the merger, including increasing costs, competition, and the need for consolidation in the Indian aviation industry. The merger combined Kingfisher's luxury model with Air Deccan's low-cost approach, and was aimed at achieving synergies through cost reductions, increased market share, and an expanded route network. However, integrating the two different airline cultures also posed challenges around job cuts, leadership styles, and impact on fares and employees. The aftermath section evaluates issues around market share, stake divestment, and the companies' current financial situations.

1. Mergers & AcquisitionsMarriage of Presented by,RohitMundhara P-21Mayuresh Bhagwate C-05Bijal Shah C-32Aditi Sabaria C-31Supriya Joshi P-13ParitoshGupte P-10

3. Monopoly of PSU’s

4. Scenario after 1990’sNew Industrial Policy 1991Air Corporation Act 1994Post liberalization period

5. Entry Of Private Players

6. Low Cost carriers

7. ConsolidationThe Need Of The Hour

9. Origin- Deccan Aviation Ltd.Growing demand of Air connectivityIdentifying potential Consumer baseThe biggest challenge

10. Towards making Air travel more ComfortableE-ticketingCut on the Complementary service - food to passengers - no meals or company vehicles - no separate staff - route planning - outsourcing of ground operations - saving operating cost, landing cost & sales tax

11. Generation of Additional RevenueSale of food inside the aircraftSelling AdvertisementDifferential ticket pricingNon refundable ticketsNo bulk discountsPaid initial training to staff

13. Dr Vijay Mallya identified the gap

14. Launched in 2005 by United Breweries Group

15. Ready for take off with 4 flights a day and a fleet of one Airbus320

16. Ushered a new era of luxury

17. Many international and national awardsCarved a niche for itself in a short span of timeOnly airline offering premium 1rst class service on domestic routesModelled on the lines of US carrier Jet BlueTargets Sec A and socio-economic classes

18. Great in-flight experience - Personal valet assistance in luggage handling at airport - Personalised in-flight entertainment system - Fashion models as flight attendants - Designer flight interiors -Extendable footrests -3course gourmet cuisine

19. Clash of The TitansMARS v/s VENUS

20. Motivation for MergerEver Increasing CostCompromise on quality hits the brandUnviable pricingCompetitionIncreasing costsDifficulty in maintaining brand imageCompetition from low-cost airlinesCompetition from International Airlines

21. Possible gainsCash crunchLeveraging management and HRRoutes networkLicense to fly internationally

22. Possible gainsEconomies of sizeRationalization of PersonnelIncrease in Customer base

23. Possible lossesFundamentally opposite modelsImpact on masses - -Fear of rise in fare prices -Ignorance of target audienceLoss of individuality

24. Final Merger Deal

27. DEAL STRUCTURE1st Phase:

28. UB bought 26% stake at Rs.155 p.s. on 9th July,2007

29. Paid Rs.550crores2nd Phase:Open offer for additional 20% stake

30. Additional Rs.418croresChanges in Stock Prices

31. COST BENEFIT ANALYSISCash Paid = Rs.550Crs + 418Crs = Rs.968CrsPresent Value of 46%stake = 62316254.28*137.5 = 856.85CrsCost for kingfisher = Cash Paid-Present Value = 968-856.85 =Rs.111.15Crs.

32. SYNERGIESOperational Synergy in the form of cost cutting(upto Rs.300crs.)Increasing market share(32-34%)Have both direct and indirect connectivity to the US, Europe and different Asian regions

33. SYNERGIESReceived in writing slots to operate flights in San Francisco, JFK (New York) and Heathrow (London)These destinations will be connected non-stop from Bangalore, unique routes from India Also applied for Mumbai-Hong Kong, Mumbai-London and Delhi-Kathmandu routes.

34. The Aftermath – Post Merger Issues Different Cultures Expected Job Cuts Different Leadership Styles