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Top Mergers & Acquisitions in
    Indian Subcontinent


                         By:
                 Rahul Sharma (94)
                 Parth Belani (73)
Mahindra and Mahindra
              & SsangYong
On Feb 2011,Mahindra acquired a 70%
 controlling stake in SsangYong, the South
 Korean auto maker for US $ 463 million.
         (Anand Mahindra, MD)
         Automobile,Defense,Energy,Agribusiness,Retail,Real
         Estate,Financial Services,Farm Equipments etc
         • Commercial Vehicles (Alfa,Maxximo,Tourister Buses,Genio,Gio etc)
         • Personal Vehicles (Bolero,Scorpio,Thar,Xylo,Verito,Quanto,REVA etc)


         (Lee Yoo-il,CEO)
         • Korando,Actyon,Rexton II,Kyron,Musso,Korando,Chairman
           W,Chairman H,Transtar
Some Key Aspects
Strong R & D workforce of Ssangyong.
Strong Dealer Network of Ssangyong i.e 98
 countries around the Globe.
Ssangyong has an edge over premium
 segment vehicles.
A way to enter Chinese Auto Market owing to
 huge potential.
GVK & Hancock Coal
 Infrastructure major GVK Power, part of the GVK Group, on
  16/Sep/2011,acquired Australia's Hancock Coal for $1.26
  billion, in one of the largest overseas acquisitions by an Indian
  infrastructure entity.
            (GVK Reddy,MD GVK Group)
            Energy,Airports,Transportation,Hospitality,Life Sciences, Resources
            etc.
            • Energy (CCPP, Coal Based Thermal Power Plants, Hydro )


            (Georgina Hope Rinehart,Chairman Hancock)
            Hancock Prospecting Pty Ltd (HPPL) is a diversified Australian energy and
            resources company, with a strong record of pioneering the economic
            development of regional Australia.
            • Founded by Lang Hancock over 50 years ago.
Some Key Aspects
 Deal included acquiring majority holding in coal
  resources and railway line and port infrastructure
  projects of Hancock Coal.
 Long term coal supply contracts for the purchase
  of up to 20 million tonnes every year.
 Capacity to support 7500MW of power generation
  w.r.t GVK.
 The Hancock coal project consists of 7.9 billion
  tonnes reserves.
 First phase of production to start in 2014 and has
  been envisaged to produce 30MT of high quality
  coal.
iGATE & Patni
On 12 May,2011 iGate acquired 82.5 % stake
 in Patni Computers.
        (Phaneesh Murthy, CEO)
        American multinational corporation which provides information
        technology, consulting and business process outsourcing (BPO) services.
        • Headquarted at Fremont, California USA.
        • Apart from India, its presence is in United States of
          America, Australia, Belgium, Canada, France, Mexico, Malaysia, United Kingdom, Germany,
          Japan, Switzerland, South Africa, Sweden




        (Jai S Pathak,Chairman)
        Services include application development, application maintenance and
        support, packaged software implementation, infrastructure management
        services, product engineering services, business process outsourcing, and
        quality assurance services.
Some Key Aspects
• Acquisition was made with a debt of $770 million
  and a convertible preferential stock issue
  amounting to $330 million.
• To acquire Patni,iGate bought the entire 45.6 per
  cent shareholdings of the promoters — Patni
  brothers Narendra, Gajendra and Ashok, and 17.4
  per cent held by private equity firm General
  Atlantic at a price of Rs 503.50 per share.
• Combined company will be a key player across
  several verticals including banking & financial
  services, insurance, manufacturing, retail, and
  media & entertainment.
JSPL & CIC Energy
 On Sep 5th,2012-Jindal BVI Limited (JBVI), a subsidiary of steel
  major Jindal Steel and Power Limited (JSPL) has acquired
  Canadian listed coal Company CIC Energy Corp. (CIC) for about
  US$115 million (over Rs 600 crore) by way of a merger of JBVI
  and CIC
            Naveen Jindal ,MD
            -It is a part of over US $ 17 billion diversified O. P. Jindal Group
            and presence in Australia, Asia, Africa etc.
            -Steel, Mining, Power Generation and Infrastructure

            Warren Newfield - CEO and Chairman
            • Coal Based Energy Company listed on Toronto & Botswana Stock
              Exchange.CIC Energy Corp. is engaged in the advancement of the
              Mmamabula Energy Complex at the Mmamabula Coal Field in Botswana,
              Africa
Some Key Aspects
 Pursuant to the merger of JBVI and CIC, JBVI will make
  cash payment of C$ 2 per share to the current CIC
  shareholders aggregating to C$ 116 Mn (approx)
 Deal will provide JSPL access to CIC’s high quality
  thermal coal in Greater Mmamabula coalfields in SE
  Botswana which is estimated to be in excess of 6 billion
  tonnes (approx).
 It will provide JSPL the opportunity to tap the highly
  lucrative and power deficient South African
  Development Community (SADC) countries and given
  the huge resource, will also provide an opportunity to
  set up a Coal to Hydrocarbons project.
FORTIS & Quality
                      Healthcare
• On 11 Oct,2010 Fortis Global Healthcare Holdings
  Pte Ltd acquired healthcare businesses of Hong
  Kong-based Quality Healthcare Asia Ltd (QHA),
  excluding QHA’s elderly healthcare business, for
  HK$1.52 Bn ($193 Mn).
          Malvinder Mohan Singh, Chairman
          • Fortis Healthcare Limited is a leading, integrated healthcare delivery provider in the Pan Asia-
            Pacific region. The healthcare verticals of the company span diagnostics, primary care, day care
            specialty and hospitals, with an asset base in 10 countries like Australia, Canada, Dubai, Hong
            Kong, India, Mauritius, New Zealand, Singapore, Sri Lanka and Vietnam



          Paul Li,CEO
          Quality HealthCare Medical Services Limited was founded in 1998
          • Life Style Enhancement,Dental Medicine,Eye Care,Skin
            Care,Physiotherapy,Dietetics etc
Some Key Aspects
 Fortis to increase it healthcare business Pan Asia
  region.
 Fortis to create an integrated healthcare business
  with high quality medical professionals and
  infrastructure.
 Fortis Global Healthcare acquired five subsidiaries
  of QHA - Quality HeatlhCare, Quality HealthCare
  Medical Holdings, Quality HealthCare Medical
  Services, Quality HealthCare Services andPortex.
The Sarkari Company that Acquired an
                   MNC
    GSPC                         GGCL
•   Gujarat State Petroleum      • Gujarat Gas Company Ltd
    Corporation                  • One of India’s leading natural
•   Oil and gas exploration        gas distribution companies
•   India's only State           • Established in 1980, and
    Government-owned oil and       headquartered in Ahmedabad
    gas company                  • Operates primarily in Gujarat
•   Incorporated in 1979,        • The BG Group acquired a
    headquartered in Ahmedabad     majority stake in the company
                                   in 1997.
• BG’s 65.12% stake for Rs 2460
  crore                                     GSPC
• India’s largest City Gas                  E&P
  Distribution (CGD) company
                                     GSPL
• Greater than Indraprastha Gas
                                  Transmission
  and Mahavitaran Gas put
  together
                                            GGCL
• 8 mmscmd gas to over 7 lakh          Distribution
  customers
Cash surplus child, Debt-burdened
                     father
    Suzlon                           RePower
•   World’s 5th Largest wind         • Germany based
    energy equipment                 • Founded in 2001
    manufacturer                     • Controlling stake acquired in
•   Established in 1995                2007 at US $ 1.6 billion
•   Headquartered in Pune            • Remaining 5% stake acquired
•   Installed capacity of 17 GW in     in October 2011
    32 countries
•   8 MW installed capacity in
    India
• The strategy was –
  – To increase international presence
  – Suzlon to work in developing countries
  – Repower to concentrate in developed countries
• What went wrong
  Losses because of
  – Rising interest cost (high debt)
  – Rising depreciation costs
Poor Financials
                         2009-10   2010-11   2011-12
Revenue                  207.79    178.79    210.82
EBIDTA                   9.43      10.47     18.21
PAT                      -9.83     -13.24    -4.79
Gross debt outstanding   97.64     102.10    131.42

In Billion Rs
Vedanta Resources             Cairn India
•   Founded : 1976, in Bombay     • Founded: 2007
•   Global mines and metals       • Based in Gurgaon
    company                       • Business: Oil and gas E&P
•   Listed on London stock        • Was part of Cairn Energy Plc.
    exchange
•   Main products: copper, zinc
    aluminum, lead, iron ore
The deal
• Vedanta Resources Plc. initially acquired 58.5% of Cairn
  India for a total consideration of $8.67 billion in August
  2010

• Later Vedanta acquired an additional 18.5% on the open
  market including a 10.4% stake from for $1.5 billion.

• Why?
   – To consolidate already strong presence in India
   – To diversify in the field of Oil and Gas

• The ONGC controversy
Mar'12   Mar'11    Mar'10   Mar'09   Dec'07
   EBIT*           12.69    -26.48     -18.5    -9.66   -49.51

    PAT*           43.96    -212.67   -68.95   54.24    -78.82

    EPS             0.23     -1.12     -0.3     0.23     -0.4

* Billion Rupees

• Q1 this year
    – 40% increase in the net profit to Rs 3825.7 crores
    – Income rose 20% to Rs 4440 crores
    – Net forex gain of Rs 866 Crores
ADAG’s Backward Integration
R-Power                   RNRL
• Founded: 2007           • Founded: 2000
• Business: Develop,      • Business: sourcing, supply
  construct and operate     and transportation of gas,
  power projects            coal and liquid fuels
The Deal
• In July 2010
• 100% stake at Rs 50000 crores
• To accelerate R-Power’s plans to set up a 10,000-Mw
  gas-based power plants.
• Diversify from a pure thermal power generation
  company to quickly venture into other value chains of
  energy business.
• To make R-Power a domestic power company with one
  of the largest coal reserves. It has about four billion
  tonnes of coal reserves in Indonesia and India
• Share swap ratio of 4:1 and the controvercy
RIL-BP Joint Venture
RIL             BP
• JV In February 2011
 • BP’s 30% stake in JV for an initial payment of
   $7.2 billion
 • 21 out of 23 blocks in KG-D6 and NEC-25

• RIL to access BP’s           • BP to get easy entry in the
  expertise in E & P of oil      Indian market
  and gas from deep below      • With minimum risk
  seabed                         because of partnership
• Technology to arrest the       with RIL
  sharp fall in production
• Fuming Oil ministry and
  DGH
• The deal to partially
  offset RIL’s expected $10
  billion investment in US
  shale gas
The deal
• JV In February 2011
• BP’s 30% stake in JV for an initial payment of
  $7.2 billion
• 21 out of 23 blocks in KG-D6 and NEC-25
Benefits
To RIL                           To BP
• RIL to access BP’s expertise   • BP to get easy entry in the
  in E & P of oil and gas from     Indian market
  deep below seabed              • With minimum risk because
• Technology to arrest the         of partnership with RIL
  sharp fall in production
• Fuming Oil ministry and
  DGH
• The deal to partially offset
  RIL’s expected $10 billion
  investment in US shale gas

            But all is not well today 
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Latest Mergers and Acquisitions

  • 1. Top Mergers & Acquisitions in Indian Subcontinent By: Rahul Sharma (94) Parth Belani (73)
  • 2. Mahindra and Mahindra & SsangYong On Feb 2011,Mahindra acquired a 70% controlling stake in SsangYong, the South Korean auto maker for US $ 463 million. (Anand Mahindra, MD) Automobile,Defense,Energy,Agribusiness,Retail,Real Estate,Financial Services,Farm Equipments etc • Commercial Vehicles (Alfa,Maxximo,Tourister Buses,Genio,Gio etc) • Personal Vehicles (Bolero,Scorpio,Thar,Xylo,Verito,Quanto,REVA etc) (Lee Yoo-il,CEO) • Korando,Actyon,Rexton II,Kyron,Musso,Korando,Chairman W,Chairman H,Transtar
  • 3. Some Key Aspects Strong R & D workforce of Ssangyong. Strong Dealer Network of Ssangyong i.e 98 countries around the Globe. Ssangyong has an edge over premium segment vehicles. A way to enter Chinese Auto Market owing to huge potential.
  • 4. GVK & Hancock Coal  Infrastructure major GVK Power, part of the GVK Group, on 16/Sep/2011,acquired Australia's Hancock Coal for $1.26 billion, in one of the largest overseas acquisitions by an Indian infrastructure entity. (GVK Reddy,MD GVK Group) Energy,Airports,Transportation,Hospitality,Life Sciences, Resources etc. • Energy (CCPP, Coal Based Thermal Power Plants, Hydro ) (Georgina Hope Rinehart,Chairman Hancock) Hancock Prospecting Pty Ltd (HPPL) is a diversified Australian energy and resources company, with a strong record of pioneering the economic development of regional Australia. • Founded by Lang Hancock over 50 years ago.
  • 5. Some Key Aspects  Deal included acquiring majority holding in coal resources and railway line and port infrastructure projects of Hancock Coal.  Long term coal supply contracts for the purchase of up to 20 million tonnes every year.  Capacity to support 7500MW of power generation w.r.t GVK.  The Hancock coal project consists of 7.9 billion tonnes reserves.  First phase of production to start in 2014 and has been envisaged to produce 30MT of high quality coal.
  • 6. iGATE & Patni On 12 May,2011 iGate acquired 82.5 % stake in Patni Computers. (Phaneesh Murthy, CEO) American multinational corporation which provides information technology, consulting and business process outsourcing (BPO) services. • Headquarted at Fremont, California USA. • Apart from India, its presence is in United States of America, Australia, Belgium, Canada, France, Mexico, Malaysia, United Kingdom, Germany, Japan, Switzerland, South Africa, Sweden (Jai S Pathak,Chairman) Services include application development, application maintenance and support, packaged software implementation, infrastructure management services, product engineering services, business process outsourcing, and quality assurance services.
  • 7. Some Key Aspects • Acquisition was made with a debt of $770 million and a convertible preferential stock issue amounting to $330 million. • To acquire Patni,iGate bought the entire 45.6 per cent shareholdings of the promoters — Patni brothers Narendra, Gajendra and Ashok, and 17.4 per cent held by private equity firm General Atlantic at a price of Rs 503.50 per share. • Combined company will be a key player across several verticals including banking & financial services, insurance, manufacturing, retail, and media & entertainment.
  • 8. JSPL & CIC Energy  On Sep 5th,2012-Jindal BVI Limited (JBVI), a subsidiary of steel major Jindal Steel and Power Limited (JSPL) has acquired Canadian listed coal Company CIC Energy Corp. (CIC) for about US$115 million (over Rs 600 crore) by way of a merger of JBVI and CIC Naveen Jindal ,MD -It is a part of over US $ 17 billion diversified O. P. Jindal Group and presence in Australia, Asia, Africa etc. -Steel, Mining, Power Generation and Infrastructure Warren Newfield - CEO and Chairman • Coal Based Energy Company listed on Toronto & Botswana Stock Exchange.CIC Energy Corp. is engaged in the advancement of the Mmamabula Energy Complex at the Mmamabula Coal Field in Botswana, Africa
  • 9. Some Key Aspects  Pursuant to the merger of JBVI and CIC, JBVI will make cash payment of C$ 2 per share to the current CIC shareholders aggregating to C$ 116 Mn (approx)  Deal will provide JSPL access to CIC’s high quality thermal coal in Greater Mmamabula coalfields in SE Botswana which is estimated to be in excess of 6 billion tonnes (approx).  It will provide JSPL the opportunity to tap the highly lucrative and power deficient South African Development Community (SADC) countries and given the huge resource, will also provide an opportunity to set up a Coal to Hydrocarbons project.
  • 10. FORTIS & Quality Healthcare • On 11 Oct,2010 Fortis Global Healthcare Holdings Pte Ltd acquired healthcare businesses of Hong Kong-based Quality Healthcare Asia Ltd (QHA), excluding QHA’s elderly healthcare business, for HK$1.52 Bn ($193 Mn). Malvinder Mohan Singh, Chairman • Fortis Healthcare Limited is a leading, integrated healthcare delivery provider in the Pan Asia- Pacific region. The healthcare verticals of the company span diagnostics, primary care, day care specialty and hospitals, with an asset base in 10 countries like Australia, Canada, Dubai, Hong Kong, India, Mauritius, New Zealand, Singapore, Sri Lanka and Vietnam Paul Li,CEO Quality HealthCare Medical Services Limited was founded in 1998 • Life Style Enhancement,Dental Medicine,Eye Care,Skin Care,Physiotherapy,Dietetics etc
  • 11. Some Key Aspects  Fortis to increase it healthcare business Pan Asia region.  Fortis to create an integrated healthcare business with high quality medical professionals and infrastructure.  Fortis Global Healthcare acquired five subsidiaries of QHA - Quality HeatlhCare, Quality HealthCare Medical Holdings, Quality HealthCare Medical Services, Quality HealthCare Services andPortex.
  • 12. The Sarkari Company that Acquired an MNC GSPC GGCL • Gujarat State Petroleum • Gujarat Gas Company Ltd Corporation • One of India’s leading natural • Oil and gas exploration gas distribution companies • India's only State • Established in 1980, and Government-owned oil and headquartered in Ahmedabad gas company • Operates primarily in Gujarat • Incorporated in 1979, • The BG Group acquired a headquartered in Ahmedabad majority stake in the company in 1997.
  • 13. • BG’s 65.12% stake for Rs 2460 crore GSPC • India’s largest City Gas E&P Distribution (CGD) company GSPL • Greater than Indraprastha Gas Transmission and Mahavitaran Gas put together GGCL • 8 mmscmd gas to over 7 lakh Distribution customers
  • 14. Cash surplus child, Debt-burdened father Suzlon RePower • World’s 5th Largest wind • Germany based energy equipment • Founded in 2001 manufacturer • Controlling stake acquired in • Established in 1995 2007 at US $ 1.6 billion • Headquartered in Pune • Remaining 5% stake acquired • Installed capacity of 17 GW in in October 2011 32 countries • 8 MW installed capacity in India
  • 15. • The strategy was – – To increase international presence – Suzlon to work in developing countries – Repower to concentrate in developed countries • What went wrong Losses because of – Rising interest cost (high debt) – Rising depreciation costs
  • 16. Poor Financials 2009-10 2010-11 2011-12 Revenue 207.79 178.79 210.82 EBIDTA 9.43 10.47 18.21 PAT -9.83 -13.24 -4.79 Gross debt outstanding 97.64 102.10 131.42 In Billion Rs
  • 17. Vedanta Resources Cairn India • Founded : 1976, in Bombay • Founded: 2007 • Global mines and metals • Based in Gurgaon company • Business: Oil and gas E&P • Listed on London stock • Was part of Cairn Energy Plc. exchange • Main products: copper, zinc aluminum, lead, iron ore
  • 18. The deal • Vedanta Resources Plc. initially acquired 58.5% of Cairn India for a total consideration of $8.67 billion in August 2010 • Later Vedanta acquired an additional 18.5% on the open market including a 10.4% stake from for $1.5 billion. • Why? – To consolidate already strong presence in India – To diversify in the field of Oil and Gas • The ONGC controversy
  • 19. Mar'12 Mar'11 Mar'10 Mar'09 Dec'07 EBIT* 12.69 -26.48 -18.5 -9.66 -49.51 PAT* 43.96 -212.67 -68.95 54.24 -78.82 EPS 0.23 -1.12 -0.3 0.23 -0.4 * Billion Rupees • Q1 this year – 40% increase in the net profit to Rs 3825.7 crores – Income rose 20% to Rs 4440 crores – Net forex gain of Rs 866 Crores
  • 20. ADAG’s Backward Integration R-Power RNRL • Founded: 2007 • Founded: 2000 • Business: Develop, • Business: sourcing, supply construct and operate and transportation of gas, power projects coal and liquid fuels
  • 21. The Deal • In July 2010 • 100% stake at Rs 50000 crores • To accelerate R-Power’s plans to set up a 10,000-Mw gas-based power plants. • Diversify from a pure thermal power generation company to quickly venture into other value chains of energy business. • To make R-Power a domestic power company with one of the largest coal reserves. It has about four billion tonnes of coal reserves in Indonesia and India • Share swap ratio of 4:1 and the controvercy
  • 23. • JV In February 2011 • BP’s 30% stake in JV for an initial payment of $7.2 billion • 21 out of 23 blocks in KG-D6 and NEC-25 • RIL to access BP’s • BP to get easy entry in the expertise in E & P of oil Indian market and gas from deep below • With minimum risk seabed because of partnership • Technology to arrest the with RIL sharp fall in production • Fuming Oil ministry and DGH • The deal to partially offset RIL’s expected $10 billion investment in US shale gas
  • 24. The deal • JV In February 2011 • BP’s 30% stake in JV for an initial payment of $7.2 billion • 21 out of 23 blocks in KG-D6 and NEC-25
  • 25. Benefits To RIL To BP • RIL to access BP’s expertise • BP to get easy entry in the in E & P of oil and gas from Indian market deep below seabed • With minimum risk because • Technology to arrest the of partnership with RIL sharp fall in production • Fuming Oil ministry and DGH • The deal to partially offset RIL’s expected $10 billion investment in US shale gas But all is not well today 