This document summarizes a presentation on mergers and acquisitions (M&A). It provides an overview of M&A, including different types of mergers, the M&A process, reasons for M&A, advantages of M&A, and examples. It specifically examines Tata Steel's acquisition of Corus Group in 2007, including reasons for the acquisition, a counter bid from another company, how the deal was funded, and the effect on stock prices of both companies as well as the result of the completed deal.

1. Mergers & Acquisitions
Presented by: Group - 4
Suhaib
Prathiba
Pooja Singh
Niraj
Raghuram Bhandhari
Nitin G. Mahendrakar

2. M & A –An Overview
* Mergers and Acquisitions M&A have become very
popular all over the world in last 3 decades.
* India born Laxmi Nivas Mittal has taken over Arcelor
in Europe, to form a largest Steel making Company in
Europe-”Arcelor-Mittal.”(130 Mtons/Year-Global) .
* Tata Steel-Corus(UK) Acquisition by Tata Steel for
$12 Billion is very significant and a landmark for the
Indian Corporate World. (28 Mtons/Annum-2006)
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3. Types of Mergers
1. Horizontal
2. vertical
3. Conglomerate
4. concentric
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4. M & A Process
Pre acquisition review
Search and screen targets
Investigate and value the target
Acquire through negotiation
Post merger integration
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5. Reasons for M & A
• Increased Market Power
• Overcome Barriers to Entry
• Lower Cost and Risk of New Product
Development
• Increased Speed to Market
• Reshaping Competitive Scope
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6. Advantages of M & A
• Drives growth
• Enhance profitability
• Mitigates risk
• Cut down competiton
• Reduces tax liability
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7. Example of Merger
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8. EXAMPLE OF MERGER
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9. ABOUT BOR AND MERGER
• ICICI OFFERED TO BOR
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10. WHY MERGER OF BOR WITH ICICI ???
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11. ICICI AFTER MERGER
• PE RATIO 22.97 10/06/10
• EPS(RS)36.10 MAR 2010
• SALES(RS crore)5826.98 MAR 2010
• FACE VALUE RS 10
• NET PROFITMARGIN(%)9074 MAR 2009
• ROAE (%)7.58 MAR2009
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12. Acquisition
An acquisition may be defined as an act of
acquiring effective control by one company
over the assets or management of another
company without any combination of
companies
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13. Legal procedure
*Sec 391 – 394 of Indian companies act covers
M & A.
*Examination of object clause
*Approval from the board
*Intimation to share holders and creditors.
*Approval from share holders and creditors.- 75% of SH
and creditors to approval
*Application to National Company Law Tribunal (NCLT)
• Petition to NCLT for approval
• Transfer of assets and Liabilities
• Issuance of shares
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14. Example of Acquisition
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15. TATA acquiring CORUS
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16. Former Name : Tata Iron and Steel Company
Type : Public BSE (500470)
Founded : 1907
Chairman : Ratan Tata
Industry : Steel
Overview of the Acquirer
Founder : Jamshedji Tata
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Headquarter : Jamshedpur, Jharkhand, India
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17. Name : Corus
Parent : Tata Steel, member of Tata Group
Type : Subsidiary
Founded : 1999
CEO : Kirby Adams
Industry : Steel
Course : SML730
Organisation Management
DMS. IIT Delhi
Overview of the Acquired
Formation : Merger of British Steel Corporation & Koninklijke Hoogovens N.V.
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Headquarter : London, England, UK
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18. Reasons for bid from TATA Group
 To tap European mature market
 Cost of acquisition is lower than setting up green
field plant and marketing and distribution channel
 Acquisition would help Tata to feature in top 10
players in the world of steel industry
 Technology benefit
 Economies of scale
 Corus held a number of patents and R&D facilities

19. Reasons for CORUS to accept bid
 Saturated market of Europe
 Decline in market share and profit
 Total debt of Corus was 1.6 Bn GBP
 High cost of production, as there was a scarcity of raw
materials
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20. Counter Bid
• Nov 18, 06 : The Brazilian Steel Group CSN
approaches Corus With an offer of 475 pence/share
• Nov 27, 06 : Board of Corus decides to give more
time for shareholders to decide whether it issue
forward a formal offer
• Dec 18,06 : Tata increases its original bid for Corus
500 pence/share, then CSN made its counter bid at
515 pence/share in cash
• Jan 29, 07 : CSN raised its bid to 603 pence/share
• Jan 31, 07 : Tata had agreed to offer Corus investors
608 pence per share in cash
• Apr 02, 07 : Tata won over CSN, to acquire Corus 20

21. How the deal was funded.???
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22. Effect on stock price of CORUS
 Corus Stock Price moved upwards as the bids moved upward
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23. Effect on stock price of TATA
 Tata steel stock moved downwards showing some volatility
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24. Effect on stock price of both TATA and CORUS
 From the announcement date till the deal completion, Corus
stock gained 67% and Tata Steel stock lost around 12%
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25. Result of the deal
 On July 23, 2007, Tata Steel stock reached 721.00 on
the Bombay Stock Exchange’s (BSE) stock Sensex after
hitting a lowest of 399.00 on March 8, 2007. Tata Steel
was one of the market leaders for the BSE Sensex up 27%
in 2007.
 Currently TATA’s are the 7th largest producer of
steel in the world.
 TATA’s credit ratting moved up from BBB to BB.

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