The document discusses several mergers and acquisitions involving major companies. It provides details of Pfizer's acquisition of Allergan and reasons for the later demerger. It also summarizes Disney's acquisition of Pixar, Facebook's acquisition of WhatsApp, Sony's acquisition of ZEE TV channels, BMW's acquisition of Rover, and Kraft's acquisition of Cadbury. In each case, it outlines the key details of the deal including value, reasons for the deal, and in some cases outcomes.

1. S.R. LUTHRA INSTITUTE OF MANAGEMENT
SUBJECT- STRATEGIC MANAGEMENT
CEC MODULE V
Sem-III / Shift 1
Topic: Merger and Acquisitions of Companies
SUBMITTED BY:
SUBMITTED TO:
Ms. Roshni Singh
(Assistant Professor)
Sr no. Name Enrollment No.
1. Jyoti Dabhi 157500592013
2. Sumit Dalmia 157500592014
3. Dhwani Joshi 157500592016
4. Kumel Rangwala 157500592046
5. Mayur Tomar 157500592052
6. Nilam Mangukiya 157500592058

3. Pfizer
Founded: 1849
Founders: Charles Pfizer and Charles F. Erhart (New York)
CEO: Ian Read (UK)
Core competency: Research-based pharmaceutical company
Acquisitions by company: Warner–Lambert (2000), Pharmacia (2002), Wyeth (2009), King
Pharmaceuticals (2010)

4. Allergan Plc.
Founded: 2015 (Through Acquisitions of Allergan Inc. by Actavis Plc.)
Founders: Allen Chao, Ph.D. and David Hsia, Ph.D.
CEO: Brenton L. Saunders (US)
Core competency: Eye care, Neurosciences, Medical dermatology, Medical aesthetics, Breast enhancement, Obesity
intervention and Urologics.

5. Reasons for Merger and Related Facts
 Value Of Deal: $160 billion (2015)
 CEO: Ian Read
 Pfizer’s Share: 56%
 Allergan’s Share: 44%
 Reason for Merger: Tax Relief for Combined Entity
 Tax: Pfizer (USA) – 39.1% and Allergan (Ireland) – 12.2%

6. Reasons for Demerger
 Government Rule of Ireland: 60% shareholding in the combined entity for tax benefit.
 Old Treasury Rule: 80% shareholding in foreign company will be charged US taxes
 New Treasury Rule: 50% shareholding in foreign company will be charged US taxes (2016)
 Fee payment of Pfizer to Allergan: $ 400 million

8. Pixar
Founded: 1979 as graphic division of Lucas Film
Founders: Alvy Ray Smith & Edwin Catmull (US)
CEO: Edwin Catmull & Jim Morris (US)
Core competency: Hardware technology and software technology (Imaging)

9. Disney
Founded: 1923
Founders: Walt and Roy Disney (US)
CEO: Bob Igler (US)
Core competency: Media Networks, Parks and Resorts, Studio Entertainment and
Consumer Products

10. Reasons for Merger and Related Facts
 Value Of Deal: $ 6.3 billion (2015)
 CEO: Bob Igler
 Disney’s Share: 100%
 Reason for Merger: To gain more profit as compared to agreements between them
 Benefit to Disney: Computer motion pictures
 Benefit to Pixar: Other lines of products such as apparels, toys, and so on

11. Facebook - WhatsApp Acquisition

12. WhatsApp
Founded Feb 24 2009
Founder Jan Koum
Stable Release iOS – Version 2.11.7
Windows – 2.11.356.0
Blackberry – 2.11.529
Android – 2.11.152
Operating System iOS, Android, Blackberry,
Nokia Series 40, Symbian,
Windows, Nokia Asha
License Proprietary

13. Facebook
Founded Feb 4 2004
Founder Mark Zuckerberg, Eduardo
Saverin, Andrew McCollum,
Dustin Moskovitz, Chris Hughes
Revenue US$7.872 billion
Operating income US$2.804 billion
Net income US$1.5 billion
Users 1.23 billion (monthly active)

15. Value of the Deal
• WhatsApp is being Acquired for $19 billion
• It includes
- USD 4 billion in cash
- USD 12 billion worth of Facebook shares
- USD 3 billion in restricted stock units
• Jan Koum to join board of directors of facebook

16. Why Acquisition
• MAU (monthly active users) will ramp up to 1 billion by 2019
• Gives it additional leverage over Twitter in the battle for more
direct messaging market share.
• WhatsApp’s function will make it a near-essential add-on to
smartphones, and this—combined with smartphone user growth
as well as user behaviour that’s shifting more and more towards
mobile.
• This will help Facebook to diversify its revenue sources away from
the U.S.

17. • WhatsApp to add voice call to its product in second half of this year.
• Two privacy groups filed a complaint with the Federal Trade Commission to
block Facebook's $19 billion acquisition of messaging service WhatsApp.
The groups want Facebook to provide more insight into how it intends to use
data from the app's 450 million users.
Present Status

19. SONY & ZEE ACQUISITION
AS A LEADING TELEVISION NETWORK IN INDIA, SPN COMPRISES SONY ENTERTAINMENT TELEVISION (SET), ONE
OF INDIA'S LEADING HINDI GENERAL ENTERTAINMENT TELEVISION CHANNELS
•MAX
• MAX 2
• SAB
• PIX
• AXN
• AATH
• MIX
• SIX
• SONY ESPN
• LIV
SONY PICTURES NETWORKS INDIA IS IN ITS 21ST
YEAR IN INDIA.

20. Zee Entertainment Enterprises
 India’s leading television media.
 More than 3,818 movie titles.
 ZEE entertains over 1 billion viewers across 171 countries.

21. ACQUISITION
 On 31 August 2016 deal took place.
 385 million US dollar in an all-cash deal.
 ZEE Ten’s Sports channel includes;
 TEN 1
 TEN HD 1
 TEN 2
 TEN 3
 TEN Golf HD
 TEN Cricket
 TEN Sports
 Ten Sports from Dubai-based Abdul Rahman Bukhatir’s
 Payment of Rs 500 crore between 2006 & 2011.
 Zee secured losses amounting to around Rs 600-640 crore.

22. Deal Factsheet
 Non-compete period of 4 years.
 All-cash deal. Sony to make payment at one go after closure of deal.
 Transaction and tax costs in the range of 5–10%.
 Deal likely to close in next 4–5 months.
 Require no objection certificates
 Deal value does not include proceeds from two ongoing court cases with BCCI.

24.
ROVER COMPANY
 A British car manufacturing company, found in 1878 as Starley &
Sutton Co.
 First car in 1904
 After a string of mergers, nationalisation and takeovers, it became
a part of the British Leyland Motor Corporation in 1968.
 The group was sold to British Aerospace in 1988 and in 1994, the
control of the group was passed to BMW of Germany.

25. BMW AG
 German automobile, engine and motorcycle manufacturing
company
 Began as aircraft engine company in 90’s.
 In 1923, first motorcycles and started car production
 BMW acquired the Rover Company in 1994 for ₤800mn. After
investing about ₤2bn and getting no synergies, it sold the company
in 2000 to Phoenix Consortium for ₤10.

26. Acquisition
 BMW wanted to increase market share and they saw rover .
 Another major factor in the acquisition was the low level of cost in
the British manufacturing sector compared to the costs in Germany.
These costs, which were 60% lesser in Britain, had the ability to
substantially reduce BMW costs.
 BMW owned Rover from 1994 to 2000 by which time the company
was piling up losses at a rate of £2million a day.

27. Outcomes
 cultural differences
 Poor leadership
 Poor due diligence
 The linguistic differences between the two companies
 BMW’s decision was partly based on the substantial cost difference
between developing the technologies in house and buying it from
Rover.

29. Summary
 Kraft Foods sealed a deal for Cadbury as the famed British chocolate
maker accepted a sweetened bid worth some US$19 billion creating a
world leader in confections. Ending a bruising months-long hostile
takeover battle, Cadbury's board agreed to an improved offer valuing the
British group at 11.5 billion pounds (US$18.9 billion), or 840 pence per
share, the companies said in a statement. Under the agreement, Cadbury
shareholders will also receive 10 pence per share via a special dividend,
lifting Kraft's offer to 11.9 billion pounds (US$19.5 billion). The deal would
make US-based Kraft, the world's second-biggest food company, one of
the biggest global players in chocolate and confections, giving the
 US group the brands of Dairy Milk and Creme Egg to go along with Kraft's
Toblerone, Milka, Suchard and Cote d'Or, among others. Investors
welcomed Tuesday's news, sending Cadbury's US-listed shares up 6.14
per cent to US$55.09. Kraft shares fell 0.57 per cent to US$29.41

30. KRAFT STRATEGIES
 Kraft foods offered a cash cum stock deal to make it
lucrative to the shareholders and also it announced a 10
pence bonus dividend to shareholders to lure them to
accept the deal.
 After the initial rejections by Cadbury Management,
Kraft made its proposals directly to Cadbury's
shareholders over the heads of its board.
 This was done to maintain competition in the market. It
sweetened the deal by offering more cash and
reducing the shares offered.

31. CADBURY’S DEFENSIVE STRATEGIES
 Cadbury moved the UK Takeover panel to pressurize Kraft.
Cadbury discussed a rival offer with Pennysylvian Company . Cadbury
was successful in boosting its 3rd Quarter results which made the
company more valuable.
 This forced Kraft to negotiate instead of just rolling out an offer. A big part
of Cadbury’s defence strategy rested on limiting the impact of hedge funds
in determining the deal.
 There is a lot of cultural changes in both the companies so it is difficult for
the companies to cope up with these changes. Both companies have
participative and helping in nature..

32. PLANS AFTER TAKEOVER
 The higher long-term growth rates in revenues and bottom lines will be
driven by revenue synergies Cadbury is highly complementary to Kraft’s
geographical footprint and will increase developing markets’ contribution to
Kraft’s net revenue from about 20% to about 25%. In recent years Kraft
ran a large project to implement the SAP ERP 6.0 system, which SAP
billed as one of its largest global ERP implementations