This document discusses mergers and acquisitions (M&A) and the role of advisory firms in the M&A process. It notes that global M&A deal value decreased in the first quarter of 2012 compared to 2011, while Europe was the only region to increase. It also provides an overview of M&A activity and deals in India. The document outlines the services advisory firms provide, such as valuation, due diligence, and negotiations support. It discusses the key success factors and challenges for M&A advisory firms.

1. Service Management
Mergers & Acquisitions
Vivek Jeyakumar
Ashish Dixit
Anuradha Hardikar

2. Definition
• Merger-the combination of two or more
companies in creation of a new entity or
formation of a holding company
• Acquisition-the purchase of shares or assets
on another company to achieve a managerial
influence

3. Global M&A Overview
• US$ 415.4bn in global M&A, down 31.2% on Q1
2011
• Europe the only region to show a quarter-on-
quarter increase
• Goldman Sachs tops global advisory league table
with deals of $125.4bn
• Private equity buyouts account for 10.3% of
global M&A
• Energy, Mining & Utilities top sector so far this
year

4. M&A in India
• Total M&A deal value was US$ 62 billion (971
deals) in 2010, it was US$ 54 billion (1026
deals) in 2011 and 1st 4 months of 2012
witnessed deal value of US$ 23 billion (396
deals).
• Witnessed some large domestic mergers like
Tech Mahindra with Satyam and Sesa Goa
with Sterlite.
• Private Equity playing a key role in the Indian
M&A landscape

5. Advisory firms
• Include investment banks, corporate lawyers,
accountants, stockbrokers, strategy
consultants
• investment banks are among the first to offer
M&A services and remain dominant players in
this business
• investment banks have increasing competition
in the M&A advisory market from commercial
banks and prominent accounting firms

6. Major M&A firms

7. Role of advisory firms
• M&A advisory firms provide the match making
service of bringing together buyers and sellers of
businesses.
• Also include the following services
– valuation of the business
– Conducting initial interviews and discussions with
prospective acquirers
– Handling the confidentiality contracts on behalf of
the client
– Providing strategic insights and negotiations skills on
behalf of the client
– Assisting with due diligence
– Resolving transaction issues throughout the process

8. Services offered
• Financial advice
• Project management
• Due diligence
• Research and valuation
• Producing a prospectus or information
Memorandum
• Contact and analysis of possible buyers/sellers
• Providing support to management &Owners
• Rules and regulations expertise
• Marketing

9. CSF of Advisory firms
• Complete and clear objectives, goals and
scope of the project
• Client consultation and acceptance
• Communication and information sharing and
exchange
• Project plan development
• Resource planning
• Time management, tight secrecy
• Price evaluation and financing scheme
• Risk management

10. Revenues for the services
• contingent fee -payable upon the
consummation of the M&A transaction.
• non-contingent fee -M&A advisory firm
receives this fee as a retained fee or an
opinion fee whether the transaction is
consummated or not.

11. Challenges
• Uncertain global economy
• Introduction of GAAR
• Political Scenario
• Interaction between different laws and
regulators

12. Thank You