value creation through m&a : cross border acquisitions (mazars presentation at assocham...
TRANSCRIPT
VALUE CREATION THROUGH M&A :CROSS BORDER ACQUISITIONS
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ASSOCHAM - 3rd National Conference on “Value Creation through Mergers & Acquisitions”
Hotel Shangri-La, New Delhi, 25 March 2015
TRENDS OF OUTBOUND M&A FROM INDIA
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OUTBOUND M&A
fast becoming a significant source of cross border investment
India expanding abroad
direct access to newer and more extensive markets and better technologies
Global Reach
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INDIA OUTBOUND M&A TREND - SECTORS
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Manufacturing, Financial/Insurance/Business Services and Mining/Agriculture have been Dominant industries in India’s outbound M&A activities in recent years.
* Includes Investments in Real Estate until December 2012
Source: RBI database on Overseas Investments
Breakdown of India’s cross-border M&A activity by industry group (in USD millions) 2011-2014
Manufacturing27%
Financial, Insurance &
Business Services*
23%
Agriculture & Mining 21%
Transport, Storage &
Communication Services
11%
Other sectors18%
INDIA OUTBOUND M&A TREND - SECTORS
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Manufacturing, Financial/Insurance/Business Services and Mining/Agriculture have been Dominant industries in India’s outbound M&A activities in recent years.
* Includes Investments in Real Estate until December 2012
Source: RBI database on Overseas Investments
Breakdown of India’s cross-border M&A activity by industry group (in USD millions) Total 2011-2014
DRIVERS BEHIND CROSS BORDER DEALS
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FACTORS DRIVING CROSS BORDER M&A
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FACTORS DRIVING CROSS BORDER M&A
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FACTORS DRIVING CROSS BORDER M&A
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FACTORS DRIVING CROSS BORDER M&A
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FACTORS DRIVING CROSS BORDER M&A
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FACTORS DRIVING CROSS BORDER M&A
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FACTORS DRIVING CROSS BORDER M&A
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THE INDIAN ENVIRONMENT FACTORS FOR CROSS BORDER ACQUISITIONS
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FACTORS DRIVING CROSS BORDER M&A
• Access to financing and capital
• policy and regulatory obstacles
• stable political environment
• The new Act removed some barriers to international mergers
• norms for foreign investment by Indian corporates
Liberal RBI Regulatory
Policy
Amendment in
Companies Act, 2013.
Access to Financing and capital
Stable political
environment
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CHARACTERISTICS OF INDIAN ACQUISITIONS OVERSEAS
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CHARACTERISTICS OF INDIAN ACQUISITIONS OVERSEAS
Strategic Acquisitions
Deal SizeTargeting developed economies
Seizing Opportunities
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WAY FORWARD FOR OUTBOUNDCROSS BORDER M&A
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PROSPECT OF INDIA’S OUT-BOUND CROSS BORDER M&A
AND KEY FACTORS OF SUCCESS
Organisational structure / Strategic
approach to location
decisions
Comprehensive due diligence
Leadership’s commitment
and communication
Post-deal integration
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FLEXIBLE ORGANISATION AND COMPREHENSIVE DUE DILIGENCE ARE CRITICAL FACTORS FOR SUCCESSFUL CROSS BORDER DEALS
Experience in the industry
Expertise in different areas
Site visit Negotiation skills in international
context
Time
Familiar with the strategic and financial
rationale behind the acquisition
Team with international experience and training
Clear rules of engagement
Tools adapted to the
international environment
Healthy flow of information
MAKE SURE THAT THERE IS AN EFFECTIVE FLEXIBLE STRUCTURE AND A
STRONG DUE DILIGENCE TEAM IN PLACE TO PERFORM CROSS BORDER M&A
STRATEGIC APPROACH FOR LOCATION DECISIONS FOR
CROSS BORDER DEALS
Coping with country risks
Pre-integration planning
Dealing with political sensitivities or historical tensions
Learning from previous deals
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COMMUNICATION IS EVEN MORE CRITICAL THAN FOR
DOMESTIC DEALS
Externally with
customers, suppliers and
partners
Internally with employees
Externally with
regulators, shareholders,
and competitors
With other stakeholders
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UNDERSTANDING OF DIFFERENCES AND LOCAL
ENVIRONMENT IS CRITICAL
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POST DEAL INTEGRATION IS CRITICAL
Integration
Post deal
Operations
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Mazars is present in 5 continents.
www.mazars.co.in
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Our offices:
Bengaluru
No 102, Gangadhara Chetty Road
Near Ulsoor Lake
Bangaluru 560042
Tel: +91 80 2554 9666
Delhi/NCR
Plot No. 421, IInd Floor
Udyog Vihar , Phase IV
Gurgaon 122016
Tel: +91 124 481 4444
Mumbai
Army & Navy Building
148 – MG Road
Mumbai 400001
Tel: +91 22 6158 7200
Pune
III Floor, Pro 1 Business Centre
Plot no 34+35, Senapati Bapat Road
Pune 411016
Tel: +91 20 2565 3365
CONTACT:
Mazars
Nicolas Ribollet
Email : [email protected]