1

Contents

Jefferies Hoare Govett wins Nord Gold broking role

Kogas gas mulls stake sale in Australia gas project

Calvin Klein buying back European licenses

Abu Dhabi developers launch merger negotiations

Hindalco-Novelis sells three aluminum plants in Europe

Book Synopsis -M&A Titans: The Pioneers Who Shaped Wall Street's Mergers and Acquisitions Industry by Brett Cole

Case Abstract Bharti Airtel completes acquisition of Zain Africa InternationalBV

Expert Interview Amith Angadi (senior manager in TCS e-serve)

Finogeny 2012

Strategy-LCMD

2

JefferiesHoareGovettwinsNordGoldbrokingrole

Jefferies Hoare Govett is an American global investment firm, which has been appointed as the

corporate broker to the Nord Gold, which is a Russian gold mining company. The role of the

corporate broker is to advise clients with minimum fee charged so as to attract more businesses.

Jefferies will act as sole broker to newly listed Nord Gold, which was appointing financial

advisors for the first time after being spun out of Russian steelmaker Severstal earlier this year.

According to this British practice, corporate brokers offer advice to clients for minimal fees,

usually in the hope of winning their bank more lucrative business, such as mergers and

acquisitions or equity fundraising, further down the line. They also act as a go-between for their

clients and investors.

Jefferies had acquired Hoare Govett, which was previously a part of Royal Bank of Scotland and

was the main contender for this acquisition. As per Peter Bacchus, the global head of Metal and

mining investment banking at Jefferies quoted “This appointment is a great indication of what is

achievable in the future."

He also stressed on the point that the competency that they have with the acquisition of Hoare

Govett gives them an edge and opens up a lot of opportunity in the market.

This acquisition has been a result of Bacchus relationship with Nord gold while he was working

with Severstal as Managing director. Jefferies acted as the first corporate broker for Nord Gold.

Jefferies acquisition of Hoare Govett from Royal Bank of Scotland made it a favorite in the hotly

contested sector, complementing other areas of European investment banking in which it has

been expanding aggressively in the past three years, including mergers and acquisitions.

Muteeb Raina 1 MBA C

3

KogasgasmullsstakesaleinAustraliagasproject

KOGAS (KOrean GAS Company) is a natural gas company established by the Korean

government in 1983. It is now the largest LNG (Liquefied Petroleum Gas) importer in the world.

It imports LNG from around the world and supplies it to the power generation plants, gas utility

companies and city gas companies throughout the republic of Korea. It purchases 26 million of

LNG a year approximately. It has 2721 kms of natural gas pipelines in South Korea. On

December 2010, it signed an agreement with the Santos Ltd to invest in the LNG Gladstone

project in Australia in a joint venture with the Santos group. Santos has posted a 51% increase in

its net profit for the year ended in December 2011. Santos agreed to sell 3.5 millions of LNG a

year to KOGAS for 15 years. This was with an option of additional 15 years that can be extended

later. The project involves development of coal seam gas resources in the Bewon and Surat

basins of Eastern Queensland, construction of a 420 kms pipeline and two LNG processing units.

Now KOGAS is considering selling part of its 15% stake in the joint venture to free up capital

for investments, said two forces with the knowledge of the deal. The plan to sell a part of the

stake is valued around a$700 million to a$800 million. The consideration is still in its initial

stages and no advisor has been appointed for this purpose. The state run firm is interested in

selling its part of the stake to the Korean counterparts and has not yet opened the sale to public.

The part of the stake in consideration may round up to 10% of its holdings. The possible buyers

include South Korean conglomerate SK group. GNLC is set to begin the production of gas in

2015 and has an estimated capacity of 7.8 million tonnes per annum. The Santos owns 30% stake

in this project. Malaysia’s PETRONAS and Total each owns 27.5% stake in the project. The

possible sale of a stake in the GLNG project comes as BG Group and Woodside Petroleum have

invited bidders for minority stake sales in each of their Australian gas projects. The stake sale

would pave the way for the restructuring of the Australian LNG sector, into which some $200

billion of investment is being poured. KOGAS’ other interest in Australia are a 10% stake in

Blue Energy Ltd and farm in agreements into two of Blue Energy’s permits.

Satya R

1 MBA A

Source: www.reuters.com

4

CalvinKleinbuyingbackEuropeanlicensesCalvin Klein, an American fashion house founded by Calvin Klein is buying back the licenses, which are currently owned by Warnaco Group Inc, an American textile corporation. Presently Warnaco Group’s products are being sold under various brand names that include Calvin Klein, Speedo, Chaps, Warner, and Olga. This move from Calvin Klein acts as a stepping-stone for its plan of further expansion of its brand from 2013 in Europe. The different licenses held by Warnaco Group include the sales and distribution as well as operation of retail stores of Calvin Klein clothing and accessories in Europe. Thus Calvin Klein expects the European business could reach sales of around $500 million by a span of five to seven years.

“Bringing the ck Calvin Klein European operations in-house creates an opportunity for us to better develop the Calvin Klein brand in Europe by leveraging PVH’s European infrastructure,” said Tom Murry, President & Chief Executive Officer, Calvin Klein. “PVH’s 2010 acquisition of Tommy Hilfiger brought with it an excellent European operating platform and distribution network with dedicated market expertise. We feel that this established platform, under the leadership of Fred Gehring, CEO of Tommy Hilfiger and PVH International, combined with the strength of our brand and Calvin Klein’s innovative in-house design and marketing teams, will accelerate the growth of the business from where it is today.”

ck Calvin Klein is Calvin Klein’s ‘bridge’ brand. The apparel line is designed by Kevin Carrigan, who serves as the Global Creative Director for the brand, as well as for the Calvin Klein (white label) and Calvin Klein Jeans brands. At the end of 2011, the ck Calvin Klein brand represented approximately $1 billion in global retail sales, achieved primarily in Asia and Europe, and had an established network of 89 full-price freestanding stores, of which 17 are in Europe. The brand is also operated in Asia and Japan by experienced licensing and retail partners.

Calvin Klein, currently headquartered in New York had almost faced bankruptcy in 1992 but was able to regain its position and increase their profitability through highly popular underwear and fragrance lines.

Calvin Klein, who started out in 1968 as a coat designer, became a man for the masses. He sold his company to Philips Van-Heusen for $438 million in 2003, and the designer Francisco Costa has created a 21st century image for Calvin Klein.

Anish Thomas 1 MBA D

Kaushik Paul 1 MBA C

Source: reuters.com http://en.wikipedia.org/wiki/Calvin_Klein http://en.wikipedia.org/wiki/Warnaco_Group http://www.thebusinessmogul.com/fashion/calvin-klein-buying-back-european-licenses/

5

AbuDhabideveloperslaunchmergernegotiations

Two of Abu Dhabi's most prominent real estate developers, Aldar Properties and Sorouh Real Estate have announced on 11 March 2012, in separate statements, that, they have launched discussions about a possible merger, as an extended property slump maintains its grip on the United Arab Emirates. The Gulf Emirate’s Government would support the merger.

Aldar properties are a Real Estate Development, Management and Investment Company with headquarters in Abu Dhabi, United Arab Emirates. Aldar was established in 200 though the UAE offsets programme. Aldar already received some $ 10 billion in government aid through two bailout rounds last year.

Established in June 2005, with capital of AED 2.5billion, Sorouh is now one of the largest real estate developers listed on the Abu Dhabi securities exchange. All Sorouhs development are undertaken in cooperation with Abu Dhabi government and its plan ‘Abu Dhabi 2030’.

The proposed tie-up would unite the Emirati capital's two most prominent property developers as they grapple with a deep property price decline that has gripped the United Arab Emirates since prices peaked in 2008. Haissam Arabi, chief executive and fund manager at Gulfmena Investments in Dubai, said a merger could benefit both companies. "The combined entity would make a mega-master developer with solid financials and government backing," Arabi said. Abu Dhabi might be willing to provide additional financial support to the merged company if needed, he added.

A working group will be formed to study the legal and commercial implications of the proposed merger. It is expected to make recommendations to senior management of both developers within three months, the companies said. Abu Dhabi's property market, like that of neighboring Dubai, was hammered as the worldwide financial crisis took hold in 2008. Analysts estimate property prices plunged by half in the Emirati capital, though new high-rises continue to be built. Abu Dhabi is the largest and richest of the seven states that make up the UAE, an OPEC member that is the Arab world's biggest economy after Saudi Arabia.

Subbaiah K. M. 1 MBA D Source: By Adam Schreck, AP Business writer, Wikipedia

6

Hindalco‐Novelissellsthreealuminumplantsin

EuropeHindalco Industries Limited, an Aditya Birla Group company acquired Novelis, a world leader in aluminum rolling and flat-rolled aluminum products. This acquisition resulted in making Hindalco the world’s largest aluminum rolling company and gave it a global stage.

Recently Novelis has decided to sell its three-aluminum foil manufacturing plants in France, Luxembourg and Germany to American Industrial Acquisition Corporation by June 2012 because the company feels the plants do not queue up with the growth strategy of company. After the sale of three plants, the headcount of employees in Europe will come down to 4400. Novelis wanted to shift its focus on automobiles, beverage cans and specialty products.

The acquisition of Novelis is a very good strategic move from Hindalco. Hindalco acquired Novelis because it wanted to increase its scale of operations and emphasize on making high- priced parts for the automotive and aerospace industries. This explains its decision of selling three aluminum-foil making plants in Europe.

After the acquisition the company has got a strong global platform and it will elevate Hindalco’s presence in recycling of aluminum products because aluminum is infinitely recyclable. Novelis also has a strong technology base which can be a boon for Hindalco.

However some analysts believe that Birla’s paid an exorbitant price for a company that incurred a loss of US$ 170 million in 2006 and it may be possible that Hindalco is selling these three plants to cover up the losses.

Hindalco will have to face many challenges in future to make this merger successful.

Aditi Agarwal 1 MBA C

Karnika Singh 1 MBA A

Source: www.steelguru.com www.iitk.ac.in

7

BookSynopsis

Title: M&A Titans: The Pioneers Who Shaped Wall Street's Mergers and Acquisitions Industry

Author: Brett Cole

Synopsis:

“M&A Titans” focuses on the eleven men, lawyers and bankers, who are responsible for the creation of Wall Street's merger industry. It specifically concentrates on the events and personalities who dominated Wall Street during the takeover battles of the 1970’s and 1980’s.

Lawyers Joe Flom and Marty Lipton, the godfathers of modern M&A, educated the bankers on takeover laws and regulations as well as tactics. Flom and Lipton were also superlative businessmen who built their own firms to become Wall Street powerhouses. The two men drew into their orbit a circle of bankers like Felix Rohatyn, Ira Harris, Steve Friedman, Geoff Boisi, Eric Gleacher, Bruce Wasserstein, Robert Greenhill and Joe Perella. “M&A Titans” provides insight into the culture of the different investment banks and how each of the bankers influenced the firms they worked in as they became more powerful. Some such as Gleacher, Harris, Wasserstein, Perella and Greenhill clashed with the men running their firms and left. Others such as Friedman and Boisi stayed and profoundly influenced how the firm did business. The career of Michael Milken, perhaps the notorious name on Wall Street in the 1980’s is also properly examined as well the operations of his investment firm- “Drexel Burnham Lambert”. Milken and Drexel paved the way for the growth of private equity and helped popularize attacks on management by investors such as Boone Pickens and Carl Icahn.

On the whole this book is a narrative history of Wall Street's most important M&A bankers: what made them, drove them, how they won deals, lost deals, tales of them leaving firms that nurtured them, losing internal political battles which forced their resignation and their return to the spotlight by establishing their own firms. Brett Cole's book “M&A Titans” is an interesting and informative read, both for insiders in the M&A world as well as those just curious to know something more about this intersection of finance, law, and business.

About the Author:

BRETT COLE is a correspondent for ‘The Economist’ covering political, economic, and financial developments in North and South Korea. Between 2003 and 2007, he reported in Wall Street while working for Bloomberg News in New York. Prior to 2003, he worked for the news agency in Japan, Taiwan, and Australia.

Source: www.goodreads.com Sherin Anie Varghese

1 MBA B

8

CaseAbstract On 8 June 2010, Bharti Airtel completes acquisition of Zain Africa International BV.

The deal had an enterprise value of US$10.7 billion. This acquisition is the second biggest overseas purchase by an Indian Company after Tata Steel’s acquisition of Anglo-Dutch steel maker Corus. With this acquisition Airtel entered the African market. According to Bharti this acquisition gave them a combined business, which will be having 180 million customers. The agreement with Zain covered 15 countries in Africa but not Zain’s operation in Sudan and its investment in Morocco. Bharti formed two special purpose vehicles in Netherlands and Singapore to execute the $10.7 billion deal. The mode of acquisition is through sale of securities. Mode of Payment made was an all cash deal.

I. US$8.3 billion within three months from the date of closing.

II. US$700 million after one year from date of closing.

III. US$1.7 billion assumed as debt in the books of Zain.

Bharti Airtel had put in place $8.5 billion war chest exclusively for this acquisition. Bharti Airtel in order to raise the required funds borrowed $7.5 billion from a consortium of banks led by Standard Chartered and Barclays Bank. State Bank of India offered rupee loan equivalent to $1 billion, which was used for transaction cost.

The issues that have been analyzed in the case are:

Reason for the acquisition of Zain Africa International BV.

Analyze whether Bharti’s Zain acquisition was expensive or not.

Understand cross-country difference in Cultural, Demographic and market conditions and its impact on business.

Analyze the role of the legal and regulatory framework, the pros and cons of the same.

Performance of Bharti-Zain one year later post acquisition

Bharti Airtel 3QFY 2012 Performance highlights

Reason for the acquisition of Zain Africa International BV

Bharti Airtel wanted to go for geographical diversification of its business operations as the India Telecom market is almost reaching a saturation point with very little space remaining for expansion in the rural India.

This acquisition enabled Bharti to emerge as the world’s fifth largest wireless company with operation spanning in 18 countries.

The acquisition would also help Bharti to increase its subscriber base significantly.

Bharti-Zain expected to generate annual revenue of $13 billion and earnings before interest, taxes, depreciation and amortization of $5 billion a year after completion of the deal.

9

Advantage point of this Acquisition

Bharti’s advantage

o Would gain more insights about the African Market.

o Knowledge transfer between Bharti and Zain focusing on data services and newer technologies (3G and 3.5G)

Zain’s Advantage

o Bharti could introduce newer tariff schemes for low Average revenue per user (ARPU) but a high volume market.

o Zain can gain from Airtel’s operational efficiency.

Hurdles faced by Airtel in Africa

Airtel had to face a lot of hurdles due to cross-country difference and market condition. The reason as to why Airtel is finding difficult in Africa could be as follows.

Complex Geographical Distribution: The agreement covered 15 countries in Africa having different regulators, different regulation, language and cultural barriers. Hence implementing a centralized approach like India is difficult with such diversity.

Managing Workforce: One of the biggest challenges to Bharti is to integrate 6500 employees of Zain, as the Zain employees became a bit cynical seeing that company change hands five times in a decade.

Poor Infrastructure: Africa lacked in a proper infrastructure, road and ports are not well developed. Again there are restrictions and curb in importing goods from other countries. Hence dealing with 15 countries and overcome this issue has proved to be nightmarish.

Protected Economies: Unlike India, the interference of Government is high. Even for the slashing of call rates there would be government intervention.

Bharti Airtel had to face hurdles due to the legal and regulatory body as well.

Nigerian Hurdle: Econet Wireless International used its ‘right of first refusal’ in respect of shares that have been breached when Econet’s Nigerian partner decided to sell their shares in Vee Network to Zain in 2006. Econet applied interim measures to prevent Zain from selling, transferring, disposing of, or dealing with those disputed stake until the matter gets resolved.

Congo Issue: The Government of Republic of Congo claimed that they had not been informed of Bharti Airtel’s deal with Zain and the deal was a clear violation of the law. The Government also told that the deal was contravention to Zain’s local mobile license.

Gabon Problem: The Government of Gabon had raised a regulatory objection to the deal claiming that Zain had not complied with certain telecom regulation hence it disapproved the sale of Zain’s Gabonese assets & reserves. Finally Government of Gabon gave its approval to the sale of Zain’s Gabonese asset to Bharti.

10

Financial Analysis of Bharti Zain Acquisition

According to analyst Bharti Zain acquisition was expensive. Bharti Airtel had to pay Zain an enterprise value of US$10.7 billion which is 10 times the Enterprise Value to Earnings before Interest, taxes, depreciation and Amortization multiple for Zain.

• Bharti paid a hefty premium of 40% to Zain for acquiring wireless business in Africa even though RoE and RoCE of Zain Africa were all low and not comparable to Airtel.

• Prior acquisition Zain Africa posted a net loss of US$112 million in the 9 months to September 2009.

• Seven units of Zain Africa were loss-making units that included its highest revenue earner Zain, Nigeria.

• Losses in the market were up to US$248million in the nine months ended September 2009 that was much more than the profit earned by the remaining eight regions. This provides a major challenge for Bharti to turnaround Zain Africa’s operation in these seven African regions.

• The deal proved to be expensive because at that time Bharti itself was available at 7.2 times EV to EBITDA

• The deal carried a huge commercial risk as in order to acquire Zain Bharti Airtel had incurred expensive loans worth US$8.3 billion at an interest rate of 195 basis point over LIBOR.

• The analysis of this deal from an EV per subscriber basis point of view does not prove to be as expensive. The enterprise value per subscriber worked out to be $217.3. This is comparable to the prices at which most deals have taken place earlier like stake taken in Spice telecom by Telecom Malaysia worked out to be US$330.

Performance of Bharti-Zain one-year later post acquisition

A year down the line Bharti Airtel International BV headquartered at Nairobi still battled in the African Market and its parent Bharti struggled for profitability and market leadership. The highlights of the events in 2011 post acquisition are as follows:

• Number of subscriber grew from 36 million in the quarter ended June 2010, when Bharti acquired Zain Africa BV to 46 million subscribers in the quarter ended June 2011.

• Bharti continued to have a net loss of $2 million on total revenue of $979 million, improving from $15 million net loss incurred by Zain in June 2010.

• Bharti leads in 8 of the 16 countries where it operates in Africa, but the fact being that it is a market leader only in the smallest countries like Chad, Malawi and Gabon.

• Rival MTN continues to be a market leader in Africa’s biggest telecom market like Nigeria, Ghana and Uganda.

• Bharti Airtel weighed down by the burden of the Zain Acquisition , 3G rollout in India, high interest payout, falling ARPU (average revenue per user)

11

Performance of Airtel in Africa (FY 2011)

Presence: 16 countries

Subscriber: 44.2 million

→ Revenue: $2878 million

→ EBITDA : $691 million

→ Usage per subscriber per month: 120 minutes (among the lowest in the world)

→ ARPU: $7.3

→ VAS : 7.9% (among the lowest in the world)

Best and Worst of Airtel Africa Operations (FY 2011)

The Best: MALAWI The Worst: Nigeria

Subscribers: 2.5 million Subscribers: 15.8 million

ARPU : $7 ARPU: $4

Minutes Of Usage: 250 million Minutes Of Usage: 100 million

Share in Total Market: 63% Share in Total Market: 10%

Biggest challenge faced by Bharti in its African Operation is to become profitable and take leadership position in the region. Till 2011 the subscriber base grew 28% since the time Bharti took charge. Bharti renewed its focus on Minutes of Usage that had grown from 3.7 billion to 16.3 billion as of August 2011.

Financial Performance of Airtel (Amount in Rs million except ratios)

Particulars FY (2010-11) FY(2009-10) Y-o-Y Growth

Gross Revenue 594672 418472 42%

EBITDA 199664 167633 19%

EBT 76782 105091 -27%

Net Income 60467 89768 -33%

Gross Assets 1503473 731871 105%

Capital Expend. 306948 108334 183%

Capital Prod. 40% 57% -

12

Bharti Airtel 3QFY 2012 Performance highlights

Bharti Airtel reported a mixed performance for 3QFY2012, with respect to revenue. Minutes of Usage (MOU) of Mobile India as well as Africa business declined by 1% and 2.5% qoq respectively.

Result Highlights

• Bharti’s consolidated revenue stood at Rs 18477cr up by 6% qoq.

• Revenue from Mobile services in India stood at Rs 10,176cr up by 4% qoq.

• MoU declined by 1% due to slow traffic growth.

• Zain Africa’s contribution stood at Rs 5358cr up by a whopping 16.7% qoq and 2.5mn net subscriber addition.

• EBITDA margin of mobile India as well as Africa business increased by 0.18bp and 0.47bp qoq to 33.8% and 26.7%, respectively.

Based on the result highlights analysts are in view that Bharti is on its way to turnaround its Africa business by bringing down its network operating expenditure. Hence a combination of stable KPIs and cost efficiencies could drive the EBITDA margin for Africa business to 26.6% and 27% by FY2012 and FY2013 respectively as speculated by the analyst. Analysts expect Bharti’s Indian and African mobile subscriber base to post a Compound Annual Growth Rate (CAGR) of 8.2% and 17.4% over FY2011-13E.

Shalini Bhaduri 1 MBA D

Sources: http://www.stockmarketsreview.com/recommendations/bharti_airtel_1qfy2010_performance_highlights_and_result_update_20100821_33177/ http://articles.economictimes.indiatimes.com/2010-03-26/news/27587204_1_bharti-zain-deal-advisory-fees-state-bank http://www.moneycontrol.com/news/business/tele-talk-is-bharti-overpaying-for-zains-assets_442296-1.html http://articles.timesofindia.indiatimes.com/2010-03-25/india-business/28117246_1_bharti-airtel-bda-india-kuwait-stock-exchange

13

ExpertInterview

Amith Angadi is an industry stalwart with over 12 years experience in Banking. He graduated in Hotel Management. He joined HSBC in 2001 and served the bank for 9 years. He was instrumental in setting up telecalling unit and later established the Collections Complaints Unit. He quit HSBC as the Assistant Vice President. He is currently a senior manager in TCS e-serve.

In this interview he shares his thoughts about the merger of Centurion Bank of Punjab with HDFC and about M&A as a concept.

Why this merger? If HDFC bank can spend 9510 crore rupees for the acquisition, why not spend that money for their own expansion and marketing? What is the thought process behind this acquisition?

Bank of Punjab first merged with Centurion Bank. HDFC was looking for nationwide expansion, specifically to have more regional presence in North India, and of course they had the money to support the idea of acquiring a bank. Added to this, considering the advantages of acquiring the regional presence in terms of branches and their accounts, it seemed very logical.

You having witnessed a merger yourself (HSBC Operations and HSBC Global resource), why do you think companies will opt for merger of their own subsidiaries? What is the logic behind merger of 2 subsidiaries within the same umbrella?

Global resource was the international operations wing of HSBC, and HSBC Operations and Processing Enterprise (HOPE) was its Indian wing for operations. They wanted to align the processes and practices followed in HOPE with global standards and hence it was only logical to merge HOPE with GR and inculcate GR’s internationally renowned working practices, policies and culture into HOPE.

For eg : The work culture, policies and practices followed by Collections department in India was now going to be the same as that in Say Singapore or New York. This means a radical shift from the domestic market’s door knocking style to International market’s telecalling oriented approach.

Coming back to HDFC - CBoP merger, how has the merger helped / hurt HDFC in 3 years from 2008?

I think it definitely helped HDFC, particularly in getting a larger footprint in the Northern India region. HDFC always had a very strong business model and now with the acquisition of CBoP, their profits accumulated and they were able to successfully fend off competition. Naturally their share value also increased with such stellar performances.

14

Do you expect more Indian banks to follow this route, especially considering the current economic gloom?

To my mind, there are quite a few Indian Banks who could get merged. For e.g.: Banks like South Indian Bank, Dhanalakshmi Bank or Karnataka Bank are very regionally concentrated. They do not have much of a Pan India presence. So they could use merger as a strategy to expand and make their presence felt all over the country. In other words, merger will be a value addition for them and not a defensive tactic.

Can you tell me about the market reaction to such mergers – from shareholder’s perspective and from employee’s perspective?

From the shareholder’s perspective, it is certainly a value addition. Maybe owing to market permutations, there will be a spike in the share value in the short run, but in the long run it will be of benefit to shareholders. But from an employee’s point of view, their will always be some level of uncertainty regarding pay scales, designatons, overlapping job roles, job security etc. But that again is just short-term apprehensions.

If you are an investor, will you be apprehensive about buying or selling shares of a company which has been involved in a recent M&A?

I will say yes because I know for a fact that HDFC’s DNA in itself is very strong. But when they are investing so much money in buying a Centurion bank that has a completely different DNA, you don’t know how it is going to affect HDFC’s share value. So I may hold my investment decision for a while to observe how the merger is shaping up and how the market is reacting to it and then go ahead with the Buy or Sell decision.

I am taking the liberty to deviate from the subject matter for the last question. As an Industry veteran, what are your expectations from fresh MBA graduates – be it regarding attitude or knowledge level?

From an industry perspective, we all are continuously trying to improve ourselves. So we need to learn from them how we can manage our desk better. By interacting with so many fresh graduates, we try to understand if there is a better way of managing our work. Yes they might make mistakes initially. But then if you have not erred, you have not ventured, and if you have not ventured you have not accomplished anything new. So their job is to learn from our mistakes, and ensure that they do not make new mistakes and to venture into the unknown.

Manu Varghese

1 MBA A

15

Finogeny2012

NationalFinanceConference

Ms K Premalatha, Research Scholar, KCT BS Kumara guru College Of Tech, Coimbatore,

Tamilnadu presented paper on “Mergers and its impact on financial performance –with reference

to telecom sectors in India.” The objective of the paper was to analyse the causes of mergers of

telecommunication industry in India and to analyse the pre and post merging impact on financial

performance of telecom sector. The paper concluded that M&As have become very popular over

the years especially during the last two decades owing to rapid changes that have taken place in

the business environment. The number and value of M&As are growing rapidly, the results of

the studies on the impact of mergers on the performance from the acquirers' shareholders

perspective have been highly disappointing. The mergers work successfully is not that easy as

here we are not only just putting the two organizations together, but also integrating people of

two organizations with different cultures, attitudes and mindsets. While making the merger deals,

it is necessary not only to make analysis of the financial aspects of the acquiring firm but also the

cultural and people issues of both the concerns for proper post-acquisition integration.

SubbaiahK.M.

1MBA‐D

16

Strategy

LCMDmatrixofacquisitions

Objective of the matrix: To understand how well is the acquisition.

To understand Mergers and Acquisitions let us understand that there are two firms A and B.

A is the firm that is acquiring firm B.

Now first of all we will do a SWOT Analysis of firm A. Each block here I have signified with an animal.

For Strength it is the LION, For Weakness it is the MICE, For Opportunity it is the COW, For Threat it is the DOG. We will try to enter Minimum 5 points or even 7 points in each block which will be according to the importance i.e. the more important point coming at the top and least important point coming at the bottom.

Their importance will be as follows

1

5 points

2

3

4 3 points

5

6 2 points

7

7 points in each block 5 points in each block

It signifies that the top 2 points hold the importance of 50%, next three 30% and last two points hold about 20% of importance in each of the block i.e. S, W, O and T.

I have shown here the different blocks as different animals for firm A because it is one which will take over the firm B, and the firm B is shown as the food for different blocks as shown in the swot analysis of the firm B.

1

5 points

2

3 3 points

4

5

2 points

17

Now again we will do the SWOT analysis of the Firm with the same 7 points in each block and the importance or the weight age will be same as firm A i.e. 50% for the first 2, 30% for the next 3 and 20% for next 2.

Now what next may be your question?

I will explain it better with taking two examples of the acquisitions so that it can be understood better. However, I will give a brief idea about what is to be done next. Now we have to see to it that all our animals get maximum food so that their stomach is filled and more the food is available to the animal the better it is. Also it is to be seen that the food is also not wasted too much as it will be a burden on the firm A to acquire those foods that will not be eaten by their animals.

LION- MEAT (Strength-of A and Weakness of B) Strength of firm A should eat up the weakness of the Firm B and the lion should be kept satisfied.

MICE-CHEESE (Weakness of A and strength of B) Here we have to see that the mice get the cheese to eat i.e. the weakness of the firm A should be helped by the firm B so as to overcome A’s weakness.

DOG-BONE (Threat of A and Opportunity of B) Here we have to see that the threats of the firm A are the opportunity to the Firm B. If the dog gets its bone it is again a good thing for our dog.

COW-GRASS Here we have to see that the threats of firm B are just an opportunity for firm A that it might be looking for from its side.

18

Now with the two examples below I will try to perform the LCMD Matrix to make it clearer.

TATA and CORUS

Swot Analysis of TATA

Swot Analysis of Corus.

19

Applying LCMD matrix.

LION AND MEAT P POINT 1.5*5=25 2.5*5=25 3.3*3=9 4.3*3=9 5.2*2=4

MMICE AND CHEESE P POINT 1.5*5=25 2.5*5=25 3.3*2=6 4.3*3=9 5.2*3=6

C COW AND GRASS POINT 1.5*3=15 2.5*5=25 3.3*3=9 4.3*5=15 5.2*2=4

D DOG AND BONE P POINT 1.5*3=15 2.5*5=25 3.3*5=15 4.3*2=6 5.2*3=6

72 71 68 67

3 4 2 1

21.6 28.4 13.6 6.7

Total score=70.3(out of 72)

Note lowest score possible=59.

Hence we see that the total lies near the highest so it is a favorable one.

Ajay Sharma 1 MBA D

Source (for images): www.Google.com

20

TeamMembers

SYMBIONT

Articles

MuteebRaina

SatyaR

AnishThomas

KaushikPaul

SubbaiahK.M.

AditiAgarwal

KarnikaSingh

Synopsis

SherinAnieVarghese

CaseAbstract

ShaliniBhaduri

ExpertInterview

ManuVarghese

Designer

DeoShaktiSingh

Finogeny

SubbaiahK.M.

Strategy

AjaySharma

Co-ordinators

Aditi Dev

Subbaiah K.M.

Mentor

Prof. Anirban Ghatak

For private circulation only