3-global diversification & mergers & acquisitions

7/25/2019 3-Global Diversification & Mergers & Acquisitions

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%aking oreign investments may lead tophenomenal success especially when madein oreign emerging markets 'nvestments inmutual unds may vary in perormances but

there are reasonably lesser risks in losing theprincipal the company had invested

Global diversifcation contributes to theadvancement in inormation technologyopening the doors or global development omultinational companies !ith the exchangeo investment comes an exchange oknowledge as well



Global investments help abolish stringent

oreign exchange control & assist in thederegulation o the fnancial system in many othe ma(or frst$world countries This can allow)exibility in trade & more room or small league

players to enter the global market industryDoing business globally have helped stabili*e

the interdependency o oreign markets buildingstronger economic ties among tiger economies

& developing countries A good example o thiscorrelation is when the +, stock market hadbeen halted due to the -.// attacks This eventhad indeed a"ected the world trade & stockmarkets at that time



Too much interdependency can sometimes cause aripple e"ect that a"ects one country to the otherspecially when many developing countries rely heavilyon the +, Dollar or its market stability

Global diversifcation had a ma(or impact in the +,housing industries where sales and prices are sinking

way beyond rock bottomGlobal investments have created a chain reaction o

unortunate events where many companies outsourcetheir workorce to cheaper countries while many arelosing (obs back home The demand or the cheapest

labor had become a rave in today’s dwindling economyGlobal diversifcation had placed mortgage frms under

fre where many consumers are orced to seekrefnancing to avoid oreclosures and many havestopped making timely mortgage payments due to

fnancial troubles



Mergers & Acquisitions are practically called by various names as:-

“purchase” or “merger” or “amalgamation”or “acquisition” or “takeover” or “absorption”

or “spin-off” or “slump-sale” or “distress-sale”“corporate restructuring” or

“external reconstruction” or“internal reconstruction” or“oint venture”



!ome mergers become successful "hile some remainunsuccessful

Mergers and Acquisitions have been resorted to by many

companies as a strategic choice to restructure or reengineertheir businesses

#oday$ the need is for better products "ith better technologies but "ith a cheaper price

%very company "ants to achieve the economies of scale by fullutiliation of its capacity and also to capture more and moremarket share

%very company "ants to be a market leader or sustain its position$ produce better quality products and sell larger units:-

'ith less cost(ess people)n less time and efforts'ith least competition%xpand the geographical Market !hare



Increase in

stake or control

Acquisition ofshares

Merger

Demerger

Sale of businessundertaking/sale of assets

Amalgamation

Absorption

Direct

increase

Passive

increase

Business

restructuring

Preferentialallotment ofshares

Capital reductionof identified

sharesShare buyback



Top 0riorities or %&As%onitor the 0aceDefne 1irm Goals

Align with Growth ,trategies

'dentiy the 2ight TargetsDo ,pecifc 3ommercial Due Diligence'dentiy Any !eaknesses Through Due DiligenceAccelerate 'ntegration to 4oost ,take 5olders’

3onfdence

Develop ,ound 6perations ,trategiesDefne the 78ew9 ,upply 3hain 6rgani*ation,et 'ntegration o 0rocesses and Technologies

:alidate %arket 0erception



'ncreased %&A activity rom emerging$marketbuyers is increasing competition & raising theprices or the best targets in both emerging &developed markets

The western methods o valuation & due diligence

may not be )exible enough or evaluatingemerging$market targets

As emerging$market contenders becomeincreasingly assertive deal makers it becomes

more important to understand their strategic intentA company’s strategic planning process will need

to be more global in reach & must ensure thatindustry$changing scenarios are ully considered



2ecogni*ing the power o emerging &developing markets

3are o various stakeholders’ interests

3ollaborative approachDue Diligence



Mergers &

AcquisitionsLegal & Regulatory

Framework

Identifying & Delivering

Synergies

Ta Regimes & Treaties

F!MA Issues

"om#any Law Issues S!$I Issues

Accounting

Treatment

3-global diversification & mergers & acquisitions

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