1. SOURCES OF VALUE CREATION
IN MERGER & ACQUISITION

2. Members of group -A
1-SOUMYALIN SANTY
2-HINA SULTANA
3-SUMIT PARIDA
4-SRADHANJALI BEHERA

3. INTRODUCTION
WHAT IS VALUE?
Value: Originated from a French word: “valoir”
which means ‘be worth’.
WHAT IS VALUE CREATION?
Value creation means performing activities that
Increases the value to customers and also to the
Shareholders.

4. Value Creation through M&A – What it
means?
• Synergies & Economies of Scale
• Gain access to new markets, customers, products
• Diversification of Risks
• Access to New Technology and Knowledge
• Ability to limit competition / gain market share

5. Value Creation Through M&A – Case
Study Company B
Company A
INVERTER
Manufacturer
Seasonality in High Level of
business Innovation
High Strong
Customer Distribution
Loyalty Network
Primarily North India Focussed Strong in Western India

6. What benefits will potentially accrue
if Company A and B were to merge?
Ability to sell bundled product
(inverters & batteries)
Organic Expansion – Access to newer markets for
Battery Manufacturing in different products (North &
North India West)
Product
Use of common
diversification /
distribution network
Season neutral
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7. “Value Creation” through this
transaction.....
Company A+B =
Enhanced revenue & customer base + product
diversification + cost savings + production
efficiencies + new markets
ultimately leading to…
‘Improved shareholders wealth’
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8. SOURCES OF VALUE CREATION IN
M&A
There are four sources or models which create
values-
1- ANSOFF’S PRODUCT MARKET MATRIX
MODEL
2- BCG MATRIX MODEL
3- GRAND MATRIX MODEL
4- INDUSTRY/PRODUCT LIFE CYCLE
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9. ANSOFF’S PRODUCT MATRIX
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10. Market Guru Phillip Kotler divided this
into 3 stages:
• 1st stage is Intensive Growth Strategy:
A. MARKET PENETRATION
B. MARKET DEVELOPMENT
C. PRODUCT DEVELOPMENT
• 2nd stage is Integrative Growth Strategy:
A. BACKWARD INTEGRATION
B. FORWARD INTEGRATION
C. HORIZONTAL INTEGRATION
• 3rd stage is diversification growth strategy:
A. CONCENTRIC DIVERSIFICATION
B. HORIZONTAL DIVERSIFICATION
C. CONGLOMETRIC DIVERSIFICATION
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11. Value Creation Through Mergers &
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12. 1.STAR- STRATEGIES APPLIED ARE INTENSIVE STRATEGY, INTEGRATIVE
STRATEGY AND CONCENTRIC.
2.QUESTION MARK-STRATEGIES APPLIED ARE INTENSIVE GROWTH
STRATEGY
3.DOG- STRATEGIES APPLIED ARE DIVESTURE AND LIQUIDATION.
4.CASH COW- CONCENTRIC CONGLOMETRIC & HORIZONTAL
DIVERSIFICATION.

13. GRAND MATRIX
• THERE ARE 4 STAGES OF GRAND MATRIX
1. STAGE 1-STAR IN BCG MATRIX
2. STAGE 2-QUESTION MARK
3. STAGE 3-DOG
4. STAGE 4-CASH COW
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14. Value Creation Through Mergers &
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15. STRATEGIES APPLIED
• INTRODUCTION STAGE: MARKET PENETRATION,MARKET
DEVELOPMENT,CONGLOMETRIC DIVERSIFICATION &
HORIZONTAL INTEGRATION
• GROWTH STAGE:HORIZONTAL MERGER, DIVESTURE,
CONGLOMERATE DIVERSIFICATION
• MATURITY STAGE: HORIZONTAL MERGER, DIVESTURE .
• DECLINE STAGE:DIVESTURE CONGLOMERATE DIVERSIFICATION.

16. CONCLUSION
From the above discussion we come to a
conclusion that for creating values for the
Acquirer’s they remain an important part of
any company’s long term value creation
Strategy. The benefits of a well thought out
M&A strategy can be a source of competitive
advantage.
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17. THANK YOU
ANY QUESTIONS………….?
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