1. Discuss briefly the motives behind acquisition of businesses and companies by existing companies and describe briefly the types of acquisitions that they make to satisfy the specific motives.
2 What is due diligence? Explain important steps in it.
Due diligence begins with legal aspects and extends to business and management considerations.
Lawyer's definition:"A process of enquiry and investigation made by a prospective purchaser in order to confirm that it is buying what it thinks it is buying."
Dealmakers view: Due diligence is about reducing transactional risk. due diligence helps to identify issues that feed into price negotiations, and hence reduce the risk of paying too much; It helps to de-risk the deal by identifying points against which legal protection should be sought.
Definition of CDD: CDD is a mini-strategy review that is carried out by acquirers of companies to:
- confirm that the company they are buying has the commercial prospects they think it has;
- help plan integation;
- show how to position an acquisition or the combined entity for maximum value.
3. What are the provisions of Income tax Act regarding income from business and profession? Examine their relevance when a company is acquiring another company.
4. Explain the provisions of accounting standard AS-14.
5.What is strategy? According to Michael Porter, what are the steps in strategy formulation? How do acquisitions support Michael Porter’s conception of strategy?
6. Give a brief account of steps involved in initiating and completing a merger in India.
7. Describe the important points in SEBI Guidelines regarding takeover in India.
8. Explain the important steps to be taken up by a company to successfully integrate an acquired unit with its operations.
9. Describe briefly various theories put forward in the area of acquisitions and mergers.
10. Explain any two empirical studies that were done in the area of acquisitions and mergers.
11. Discuss the reasons why companies divest some divisions and discuss any one empirical study on the performance of companies and that divested the divisions and companies that acquired the divisions.
Tuesday, December 4, 2007
Wednesday, November 14, 2007
IBM to Buy Cognos in $4.9 Billion Deal
November 12, 2007 Monday
IBM said Monday it would acquire Cognos, a maker of business-intelligence software, in an all-cash deal it valued at about $4.9 billion. Cognos is based in Canada, Its rival, Business Objects, agreed to be bought by SAP last month.
At $58 per share, IBM’s offer is 9.5 percent higher than Cognos’s closing share price Friday. That is not a particularly fat premium, but Cognos’s stock has already risen sharply amid rampant speculation that buyers were circling.
Earlier this year, Oracle agreed to buy Hyperion Solutions. Then in October, SAP swooped in on Business Objects, leaving Cognos as the only large, independent vendor of business-intelligence software, which companies use to analyze their operations. Analysts generally assumed that Cognos would not stay independent for long.
Monday’s deal between IBM and Cognos was a friendly one, but it is still subject to shareholder approval. IBM said it expects the transaction to close in the first quarter of 2008.
http://dealbook.blogs.nytimes.com/2007/11/12/ibm-to-buy-cognos-in-5-billion-deal/#more-18832
IBM to Acquire Cognos to Accelerate Information on Demand Business Initiative (Press Release)
ARMONK, N.Y. & OTTAWA, Ontario - 12 Nov 2007: IBM (NYSE: IBM) and Cognos® (NASDAQ: COGN) (TSX: CSN) today announced that the two companies have entered into a definitive agreement for IBM to acquire Cognos, a publicly-held company based in Ottawa, Ontario, Canada, in an all-cash transaction at a price of approximately $5 billion USD or $58 USD per share, with a net transaction value of $4.9 billion USD. The acquisition is subject to Cognos shareholder approval, regulatory approvals and other customary closing conditions. It is expected to close in the first quarter of 2008.
The acquisition of Cognos supports IBM's Information on Demand strategy, a cross-company initiative announced on February 16, 2006 that combines IBM's strength in information integration, content and data management and business consulting services to unlock the business value of information. Integrating Cognos, the 23rd IBM acquisition in support of its Information on Demand strategy, will enable new business insights to be delivered to a broader set of people across an organization, beyond the traditional users of business intelligence.
IBM said the acquisition fits squarely within both its acquisition strategy and capital allocation model, and that it will contribute to the achievement of the company’s objective for earnings-per-share growth through 2010.
“Customers are demanding complete solutions, not piece parts, to enable real-time decision making," said Steve Mills, senior vice president and group executive, IBM Software Group. "IBM has been providing Business Intelligence solutions for decades. Our broad set of capabilities – from data warehousing to information integration and analytics – together with Cognos, position us well for the changing Business Intelligence and Performance Management industry. We chose Cognos because of its industry-leading technology that is based on open standards, which complements IBM's Service Oriented Architecture strategy.”
Together, IBM and Cognos will become the leading provider of technology and services for Business Intelligence (BI) and Performance Management, delivering the industry’s most complete, open standards-based platform with the broadest range of expertise to help companies expand the value of their information, optimize their business processes and maximize performance across their enterprises.
The acquisition of Cognos accelerates IBM’s global Information on Demand initiative to unlock the business value of information for our customers. IBM will provide broader reach for Cognos solutions across multiple industries and geographies with a more complete set of offerings, including consulting services, hardware, and other middleware software.
Cognos provides the only complete BI and performance management platform, fully integrated on an open-standards-based service oriented architecture (SOA), and has a strong history of supporting heterogeneous application environments, consistent with IBM’s approach. With Cognos, customers can turn data into actionable insight for coordinated, information-driven decision-making to improve overall performance. Cognos will also extend IBM’s reach further into the CFO office with powerful financial planning and consolidation capabilities.
“This is an exciting combination for our customers, partners, and employees. It provides us with the ability to expand our vision as the leading BI and Performance Management provider,” said Rob Ashe, president and chief executive officer, Cognos. “IBM is a perfect complement to our strategy, with minimal overlap in products, a broad range of technology synergies, and the resources, reach, and world-class services to accelerate this vision. Furthermore, this combination allows Cognos customers to leverage a broader set of solutions from IBM to advance their information management driven initiatives.”
Together, IBM and Cognos will expand IBM’s ability to provide customers with the right information they need when they need it, to optimize operational performance, and to quickly respond to changing market demands. The combination of IBM’s information management technology and Cognos will also help organizations discover new ways to use trusted information spread across their enterprises to identify new business opportunities and significantly reduce the expense and time required to address industry-specific business challenges.
Following completion of the acquisition, IBM intends to integrate Cognos as a group within IBM's Information Management Software division, focused on Business Intelligence and Performance Management. IBM also will appoint current Cognos President and CEO, Rob Ashe, to lead the group, reporting directly to General Manager, Ambuj Goyal.
Cognos has approximately 4,000 employees worldwide and serves more than 25,000 customers. IBM and Cognos have partnered for more than 15 years, with extensive technical integrations and eight pre-integrated joint solutions already supporting many joint customers, such as New York City Police Department, Blue Cross and Blue Shield of Tennessee, Canadian Tire, MetLife, and Bayer UK.
Other strategic acquisitions in support of IBM’s Information on Demand initiative include Princeton Softech (data archiving and compliance), FileNet (enterprise content management), Ascential Software (information integration), DataMirror (changed data capture), SRD (entity analytics), Trigo (product information management), DWL (customer information management) and Alphablox (analytics).
More information on IBM’s acquisition of Cognos is available on IBM’s investor Web site at: http://www.ibm.com/investor/viewpoint/ircorner/2007/07-11-12-1.phtml.
About IBM
For more information about IBM’s Information on Demand strategy, go to: http://www.ibm.com/software/data/information-on-demand/. Additional details about the combination of IBM and Cognos are available at: http://www.ibm.com/software/data/info/cognos
About Cognos
For more information, visit the Cognos Web site at: http://www.cognos.com/
Information About the Transaction
The transaction will be completed through a plan of arrangement, which will require the approval of shareholders representing two thirds of the shares cast. Shareholders will be asked to vote on the transaction at a special meeting, the details of which will be announced in due course.
The transaction has been unanimously approved by the board of directors of Cognos following delivery of a fairness opinion, which will be included in a proxy circular to be prepared and mailed to Cognos shareholders over the coming weeks providing shareholders with important information about the transaction. A material change report, which provides more details on the transaction, will be filed with the Canadian provincial securities regulatory authorities and with the U.S. Securities and Exchange Commission and will be available at www.sedar.com and at www.sec.gov.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed transaction between IBM and Cognos, the expected timetable for completing the transaction, benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding IBM and Cognos’s future expectations, beliefs, goals or prospects constitute forward-looking statements made within the meaning of Section 21E of the Securities Exchange Act of 1934 and forward-looking information within the meaning of Section 138.4(9) of the Ontario Securities Act (collectively, forward-looking statements). Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered forward-looking statements. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the parties’ ability to consummate the transaction; the conditions to the completion of the transaction, including the receipt of shareholder approval, court approval or the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the arrangement within the expected time-frames or at all and to successfully integrate Cognos’s operations into those of IBM; such integration may be more difficult, time-consuming or costly than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; the retention of certain key employees of Cognos may be difficult; IBM and Cognos are subject to intense competition and increased competition is expected in the future; fluctuations in foreign currencies could result in transaction losses and increased expenses; the volatility of the international marketplace; and the other factors described in IBM’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and in its most recent quarterly report filed with the SEC, and Cognos’s Annual Report on Form 10-K for the fiscal year ended February 28, 2007 and in its most recent quarterly report filed with the SEC. IBM and Cognos assume no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the proposed acquisition of Cognos by IBM. In connection with the proposed acquisition, Cognos intends to file relevant materials with the SEC, including Cognos’s proxy circular. SHAREHOLDERS OF COGNOS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING COGNOS’S PROXY CIRCULAR, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov, and Cognos shareholders will receive information at an appropriate time on how to obtain transaction-related documents for free from Cognos. Such documents are not currently available.
Participants in Solicitation
IBM and its directors and executive officers, and Cognos and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of Cognos common shares in respect of the proposed transaction. Information about the directors and executive officers of IBM is set forth in the proxy statement for IBM’s 2007 Annual Meeting of Stockholders, which was filed with the SEC on April 2, 2007. Information about the directors and executive officers of Cognos is set forth in the proxy statement for Cognos’s 2007 Annual and Special Meeting of Shareholders, which was filed with the SEC on May 24, 2007. Investors may obtain additional information regarding the interest of such participants by reading the proxy circular regarding the acquisition when it becomes available.
Contact(s) information
Chris Andrews
IBM Media Relations
914-766-1195
candrews@us.ibm.com
Kory Liss
IBM Investor Relations
914-499-4095
kory@us.ibm.com
Steve Milmore
Cognos Media Relations
781-313-2403
steve.milmore@cognos.com
John Lawlor
Cognos Investor Relations
613-738-3503
john.lawlor@cognos.com
http://www-03.ibm.com/press/us/en/pressrelease/22572.wss
IBM said Monday it would acquire Cognos, a maker of business-intelligence software, in an all-cash deal it valued at about $4.9 billion. Cognos is based in Canada, Its rival, Business Objects, agreed to be bought by SAP last month.
At $58 per share, IBM’s offer is 9.5 percent higher than Cognos’s closing share price Friday. That is not a particularly fat premium, but Cognos’s stock has already risen sharply amid rampant speculation that buyers were circling.
Earlier this year, Oracle agreed to buy Hyperion Solutions. Then in October, SAP swooped in on Business Objects, leaving Cognos as the only large, independent vendor of business-intelligence software, which companies use to analyze their operations. Analysts generally assumed that Cognos would not stay independent for long.
Monday’s deal between IBM and Cognos was a friendly one, but it is still subject to shareholder approval. IBM said it expects the transaction to close in the first quarter of 2008.
http://dealbook.blogs.nytimes.com/2007/11/12/ibm-to-buy-cognos-in-5-billion-deal/#more-18832
IBM to Acquire Cognos to Accelerate Information on Demand Business Initiative (Press Release)
ARMONK, N.Y. & OTTAWA, Ontario - 12 Nov 2007: IBM (NYSE: IBM) and Cognos® (NASDAQ: COGN) (TSX: CSN) today announced that the two companies have entered into a definitive agreement for IBM to acquire Cognos, a publicly-held company based in Ottawa, Ontario, Canada, in an all-cash transaction at a price of approximately $5 billion USD or $58 USD per share, with a net transaction value of $4.9 billion USD. The acquisition is subject to Cognos shareholder approval, regulatory approvals and other customary closing conditions. It is expected to close in the first quarter of 2008.
The acquisition of Cognos supports IBM's Information on Demand strategy, a cross-company initiative announced on February 16, 2006 that combines IBM's strength in information integration, content and data management and business consulting services to unlock the business value of information. Integrating Cognos, the 23rd IBM acquisition in support of its Information on Demand strategy, will enable new business insights to be delivered to a broader set of people across an organization, beyond the traditional users of business intelligence.
IBM said the acquisition fits squarely within both its acquisition strategy and capital allocation model, and that it will contribute to the achievement of the company’s objective for earnings-per-share growth through 2010.
“Customers are demanding complete solutions, not piece parts, to enable real-time decision making," said Steve Mills, senior vice president and group executive, IBM Software Group. "IBM has been providing Business Intelligence solutions for decades. Our broad set of capabilities – from data warehousing to information integration and analytics – together with Cognos, position us well for the changing Business Intelligence and Performance Management industry. We chose Cognos because of its industry-leading technology that is based on open standards, which complements IBM's Service Oriented Architecture strategy.”
Together, IBM and Cognos will become the leading provider of technology and services for Business Intelligence (BI) and Performance Management, delivering the industry’s most complete, open standards-based platform with the broadest range of expertise to help companies expand the value of their information, optimize their business processes and maximize performance across their enterprises.
The acquisition of Cognos accelerates IBM’s global Information on Demand initiative to unlock the business value of information for our customers. IBM will provide broader reach for Cognos solutions across multiple industries and geographies with a more complete set of offerings, including consulting services, hardware, and other middleware software.
Cognos provides the only complete BI and performance management platform, fully integrated on an open-standards-based service oriented architecture (SOA), and has a strong history of supporting heterogeneous application environments, consistent with IBM’s approach. With Cognos, customers can turn data into actionable insight for coordinated, information-driven decision-making to improve overall performance. Cognos will also extend IBM’s reach further into the CFO office with powerful financial planning and consolidation capabilities.
“This is an exciting combination for our customers, partners, and employees. It provides us with the ability to expand our vision as the leading BI and Performance Management provider,” said Rob Ashe, president and chief executive officer, Cognos. “IBM is a perfect complement to our strategy, with minimal overlap in products, a broad range of technology synergies, and the resources, reach, and world-class services to accelerate this vision. Furthermore, this combination allows Cognos customers to leverage a broader set of solutions from IBM to advance their information management driven initiatives.”
Together, IBM and Cognos will expand IBM’s ability to provide customers with the right information they need when they need it, to optimize operational performance, and to quickly respond to changing market demands. The combination of IBM’s information management technology and Cognos will also help organizations discover new ways to use trusted information spread across their enterprises to identify new business opportunities and significantly reduce the expense and time required to address industry-specific business challenges.
Following completion of the acquisition, IBM intends to integrate Cognos as a group within IBM's Information Management Software division, focused on Business Intelligence and Performance Management. IBM also will appoint current Cognos President and CEO, Rob Ashe, to lead the group, reporting directly to General Manager, Ambuj Goyal.
Cognos has approximately 4,000 employees worldwide and serves more than 25,000 customers. IBM and Cognos have partnered for more than 15 years, with extensive technical integrations and eight pre-integrated joint solutions already supporting many joint customers, such as New York City Police Department, Blue Cross and Blue Shield of Tennessee, Canadian Tire, MetLife, and Bayer UK.
Other strategic acquisitions in support of IBM’s Information on Demand initiative include Princeton Softech (data archiving and compliance), FileNet (enterprise content management), Ascential Software (information integration), DataMirror (changed data capture), SRD (entity analytics), Trigo (product information management), DWL (customer information management) and Alphablox (analytics).
More information on IBM’s acquisition of Cognos is available on IBM’s investor Web site at: http://www.ibm.com/investor/viewpoint/ircorner/2007/07-11-12-1.phtml.
About IBM
For more information about IBM’s Information on Demand strategy, go to: http://www.ibm.com/software/data/information-on-demand/. Additional details about the combination of IBM and Cognos are available at: http://www.ibm.com/software/data/info/cognos
About Cognos
For more information, visit the Cognos Web site at: http://www.cognos.com/
Information About the Transaction
The transaction will be completed through a plan of arrangement, which will require the approval of shareholders representing two thirds of the shares cast. Shareholders will be asked to vote on the transaction at a special meeting, the details of which will be announced in due course.
The transaction has been unanimously approved by the board of directors of Cognos following delivery of a fairness opinion, which will be included in a proxy circular to be prepared and mailed to Cognos shareholders over the coming weeks providing shareholders with important information about the transaction. A material change report, which provides more details on the transaction, will be filed with the Canadian provincial securities regulatory authorities and with the U.S. Securities and Exchange Commission and will be available at www.sedar.com and at www.sec.gov.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed transaction between IBM and Cognos, the expected timetable for completing the transaction, benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding IBM and Cognos’s future expectations, beliefs, goals or prospects constitute forward-looking statements made within the meaning of Section 21E of the Securities Exchange Act of 1934 and forward-looking information within the meaning of Section 138.4(9) of the Ontario Securities Act (collectively, forward-looking statements). Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered forward-looking statements. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the parties’ ability to consummate the transaction; the conditions to the completion of the transaction, including the receipt of shareholder approval, court approval or the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the arrangement within the expected time-frames or at all and to successfully integrate Cognos’s operations into those of IBM; such integration may be more difficult, time-consuming or costly than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; the retention of certain key employees of Cognos may be difficult; IBM and Cognos are subject to intense competition and increased competition is expected in the future; fluctuations in foreign currencies could result in transaction losses and increased expenses; the volatility of the international marketplace; and the other factors described in IBM’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and in its most recent quarterly report filed with the SEC, and Cognos’s Annual Report on Form 10-K for the fiscal year ended February 28, 2007 and in its most recent quarterly report filed with the SEC. IBM and Cognos assume no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the proposed acquisition of Cognos by IBM. In connection with the proposed acquisition, Cognos intends to file relevant materials with the SEC, including Cognos’s proxy circular. SHAREHOLDERS OF COGNOS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING COGNOS’S PROXY CIRCULAR, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov, and Cognos shareholders will receive information at an appropriate time on how to obtain transaction-related documents for free from Cognos. Such documents are not currently available.
Participants in Solicitation
IBM and its directors and executive officers, and Cognos and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of Cognos common shares in respect of the proposed transaction. Information about the directors and executive officers of IBM is set forth in the proxy statement for IBM’s 2007 Annual Meeting of Stockholders, which was filed with the SEC on April 2, 2007. Information about the directors and executive officers of Cognos is set forth in the proxy statement for Cognos’s 2007 Annual and Special Meeting of Shareholders, which was filed with the SEC on May 24, 2007. Investors may obtain additional information regarding the interest of such participants by reading the proxy circular regarding the acquisition when it becomes available.
Contact(s) information
Chris Andrews
IBM Media Relations
914-766-1195
candrews@us.ibm.com
Kory Liss
IBM Investor Relations
914-499-4095
kory@us.ibm.com
Steve Milmore
Cognos Media Relations
781-313-2403
steve.milmore@cognos.com
John Lawlor
Cognos Investor Relations
613-738-3503
john.lawlor@cognos.com
http://www-03.ibm.com/press/us/en/pressrelease/22572.wss
Friday, October 19, 2007
Failed Acquisition - Sprint - Nextel
Sprint CEO Out
excerpted from Washington Post:
Sprint Nextel said yesterday that chairman and chief executive Gary D. Forsee will step down immediately, just two years after directing the $35 billion merger that created the nation's third-largest wireless company.
The board was unhappy with Sprint's recent performance. Sprint warned yesterday that it expects to lose another 337,000 monthly customers in the current quarter and lowered its annual revenue expectations.
Forsee's main job was to parlay the merger into a telecom powerhouse while charting a lucrative path in the growing and intensely competitive wireless industry. But he failed to accomplish those goals in the view of Wall Street and the company's board of directors.
[...]
Now his departure leaves the Reston company at a difficult crossroads. The merger pitched two years ago as a combination of complementary companies has fallen flat, leaving engineering problems with the new network in its wake, sending its stock in a downward spiral and its customers fleeing to larger rivals.
Forsee, who has described himself as a leader capable of executing plans, has come under fire for failing to bridge the cultural and technical gaps between the two companies and forging a solid financial course for Sprint. As the company tried to phase out the Nextel network, consumers experienced dropped calls and a smaller coverage area.
Other wireless companies grew by emphasizing superior networks or better value, while Sprint's advertising campaign failed to establish its place in the market. With more than 80 percent of the U.S. population carrying a cellphone, wireless carriers are ruthlessly competing for one another's customers.
"Sprint's not starting with a clean slate, but it will at least be able to reset expectations now that Forsee is gone," said Michael Nelson, an equity analyst with the Stanford Group. "Of all the wireless carriers, Sprint is the only one that still hasn't found its identity."
[...]
Some analysts and business school professors cite the marriage of Sprint and Nextel as a case study of a poorly conceived merger. Their wireless networks were largely incompatible, and the companies' cultures were worlds apart. Sprint was more than a century old and had a legacy in the local and long-distance telephone business. Nextel was barely a decade old, a scrappy up-and-comer that had cobbled together its network out of cab companies' walkie-talkie licenses. Sprint's strength in the wireless business came from its appeal to consumers; more than 90 percent of Nextel's customer base came from the blue-collar workforce. The companies' headquarters were also separated by half a continent, and more than half of the company's workforce remains in Overland Park, Kan., where Sprint had been based.
One of Forsee's most controversial moves was to commit $5 billion to building a new high-speed wireless network using a new technology called WiMax, which he promised would be up to five times faster than current cellular networks. He forged partnerships with start-up Clearwire to construct the network; with Google to search on the network; and with Motorola, Samsung and Nokia to build cutting edge-devices to roam on the network.
But he wanted to use WiMax technology, which met heavy skepticism from analysts because it is largely untested. The build-out has already hit delays.
Forsee tried to calm impatient investors by unveiling new cellphones, improving customer service, working with cable companies and revamping the company's marketing campaign. But he ran out of time by late summer, when the board scrapped the search for the No. 2 position and started looking for a replacement for the top job.
"Forsee will be blamed for a failed acquisition, but I don't believe he will be the last to exit," said Ben Abramovitz, senior analyst at ICAP Equity Research. "One man can't be blamed for all the issues Sprint currently has."
http://soonerthought.blogspot.com/2007/10/sprint-ceo-out.html
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/08/AR2007100801117.html?wpisrc=newsletter&sid=ST2007100801847
excerpted from Washington Post:
Sprint Nextel said yesterday that chairman and chief executive Gary D. Forsee will step down immediately, just two years after directing the $35 billion merger that created the nation's third-largest wireless company.
The board was unhappy with Sprint's recent performance. Sprint warned yesterday that it expects to lose another 337,000 monthly customers in the current quarter and lowered its annual revenue expectations.
Forsee's main job was to parlay the merger into a telecom powerhouse while charting a lucrative path in the growing and intensely competitive wireless industry. But he failed to accomplish those goals in the view of Wall Street and the company's board of directors.
[...]
Now his departure leaves the Reston company at a difficult crossroads. The merger pitched two years ago as a combination of complementary companies has fallen flat, leaving engineering problems with the new network in its wake, sending its stock in a downward spiral and its customers fleeing to larger rivals.
Forsee, who has described himself as a leader capable of executing plans, has come under fire for failing to bridge the cultural and technical gaps between the two companies and forging a solid financial course for Sprint. As the company tried to phase out the Nextel network, consumers experienced dropped calls and a smaller coverage area.
Other wireless companies grew by emphasizing superior networks or better value, while Sprint's advertising campaign failed to establish its place in the market. With more than 80 percent of the U.S. population carrying a cellphone, wireless carriers are ruthlessly competing for one another's customers.
"Sprint's not starting with a clean slate, but it will at least be able to reset expectations now that Forsee is gone," said Michael Nelson, an equity analyst with the Stanford Group. "Of all the wireless carriers, Sprint is the only one that still hasn't found its identity."
[...]
Some analysts and business school professors cite the marriage of Sprint and Nextel as a case study of a poorly conceived merger. Their wireless networks were largely incompatible, and the companies' cultures were worlds apart. Sprint was more than a century old and had a legacy in the local and long-distance telephone business. Nextel was barely a decade old, a scrappy up-and-comer that had cobbled together its network out of cab companies' walkie-talkie licenses. Sprint's strength in the wireless business came from its appeal to consumers; more than 90 percent of Nextel's customer base came from the blue-collar workforce. The companies' headquarters were also separated by half a continent, and more than half of the company's workforce remains in Overland Park, Kan., where Sprint had been based.
One of Forsee's most controversial moves was to commit $5 billion to building a new high-speed wireless network using a new technology called WiMax, which he promised would be up to five times faster than current cellular networks. He forged partnerships with start-up Clearwire to construct the network; with Google to search on the network; and with Motorola, Samsung and Nokia to build cutting edge-devices to roam on the network.
But he wanted to use WiMax technology, which met heavy skepticism from analysts because it is largely untested. The build-out has already hit delays.
Forsee tried to calm impatient investors by unveiling new cellphones, improving customer service, working with cable companies and revamping the company's marketing campaign. But he ran out of time by late summer, when the board scrapped the search for the No. 2 position and started looking for a replacement for the top job.
"Forsee will be blamed for a failed acquisition, but I don't believe he will be the last to exit," said Ben Abramovitz, senior analyst at ICAP Equity Research. "One man can't be blamed for all the issues Sprint currently has."
http://soonerthought.blogspot.com/2007/10/sprint-ceo-out.html
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/08/AR2007100801117.html?wpisrc=newsletter&sid=ST2007100801847
Tuesday, August 28, 2007
Buyout deals by PE firms in India
Mint August 28, 2007 page 18
Puchase of 50.1% + 20% open offer can be counted as the 10th buyout deal by PE firms in India.
The article quotes ICICI Venture Funds Management Co.'s buyout of Tata Infomedia, Actis Capital Llp's buyout of ICI India Ltd.s nitrocellulose manufacturing unit. The article mentioned that ACTis did 3 more deals. ICICI Venture went on to do first successful LBO deal, ACE Refractories Ltd. in 2005, which was sold this month for Rs.550 cr against an investment of Rs. 100 cr. Blackstone backed a management buyout of Mumbai based Intelenet Global Services Pvt. Ltd.
Banks which lend to LBO investors abroad are not yet comfortable doing the same in India.
author: Snigdha Sengupta, Mints resident expert on PE and VC. Comments and questions are welcome at venturematters@livemint.com
Puchase of 50.1% + 20% open offer can be counted as the 10th buyout deal by PE firms in India.
The article quotes ICICI Venture Funds Management Co.'s buyout of Tata Infomedia, Actis Capital Llp's buyout of ICI India Ltd.s nitrocellulose manufacturing unit. The article mentioned that ACTis did 3 more deals. ICICI Venture went on to do first successful LBO deal, ACE Refractories Ltd. in 2005, which was sold this month for Rs.550 cr against an investment of Rs. 100 cr. Blackstone backed a management buyout of Mumbai based Intelenet Global Services Pvt. Ltd.
Banks which lend to LBO investors abroad are not yet comfortable doing the same in India.
author: Snigdha Sengupta, Mints resident expert on PE and VC. Comments and questions are welcome at venturematters@livemint.com
Tuesday, August 21, 2007
Gopal Ramanathan - Global Head KPMG Transaction Services
Et, 19-4-2007 Page 16
Start post-M&A planning early on.
Private equity houses are able to handle post-deal issues better than corporations.
Start post-M&A planning early on.
Private equity houses are able to handle post-deal issues better than corporations.
Rajnish Karki - Research and advisory boutique
Corporate Dossier, 20-4-2007, page 3
India focused and India diversified strategic stances are equally viable effective in India context. Organisation structure depends on strategic stance.
India focused and India diversified strategic stances are equally viable effective in India context. Organisation structure depends on strategic stance.
Monday, August 20, 2007
Research Paper Summary James D. Rosenfeld Relation between Divestiture Announcements and Shareholder Wealth
James D. Rosenfeld, “Additional Evidence on the Relation between Divestiture Announcements and Shareholder Wealth,” Journal of Finance, Vol. 39, December 1984, pp. 1437-1448
Summary by
Himagiri Gedela
PGDIE 36, NITIE
A Divestiture is an alteration of the firm’s productive asset portfolio and is accomplished by either spinning-off or selling-off the unwanted assets.
The current paper presents estimates of the effect of voluntary divestiture announcements on shareholder wealth. The purpose of the paper is to provide further evidence regarding the impact of voluntary spin-offs and sell-offs on share holder wealth, in addition to the evidence found from the Earlier studies.
Some earlier studies[1,2,3] suggest that “Spin-off announcements have a positive influence on common-stock prices around the day of the event, while another study[4] suggests a far weaker response which the author contrasts with in the current paper.
The author finds that both types of divestitures have a significantly positive influence on share prices and that the spin-offs “outperform” the sell-offs over the announcement period. Unlike the merger studies that show that acquiring firms tend to “break even” on the transaction, the current study shows that the economic gains to both groups of share holders are virtually identical.
Motives underlying divestitures
The Goal of financial management is to maximize owner wealth; the firm should not undertake a divestiture unless the transaction is expected to benefit its shareholders.
Sell-offs
1. Sales price exceeds the present value of the divested asset’s future Net Cash Flows (NCFs).
2. Desire to sell unprofitable ventures while the buyer has a competitive edge over the seller (e.g., in manufacturing or marketing) which makes future NCFs more from buyers perspective. (Such projects are called as Positive NPV projects for both the parties).
Interpreting divestitures as a positive signal should have positive influence on share prices.
A negative signal, such as a need for cash to maintain corporate solvency, would have opposite effect on share holders wealth.
The signaling effect could either reinforce or dampen the investment effect.
Spin-offs
1. Elimination of negative synergies to increase future NCFs.
2. An alteration of the divested unit’s tax status to increase future NCFs.
3. For proper allocation (improving investment decisions) to enhance the value of divested assets.
4. May erode the position of bondholders causing a wealth transfer to stock holders while leaving the value of the firm unchanged.
5. Creation of publicly traded firms results in new information sources which enable shareholders to closely monitor the activities of managers, thereby reducing agency costs and enhancing share holders wealth.
Research Design
Focus: Comparison of each event’s influence on the stock prices of both the divesting and, in case of sell-offs, acquiring firms.
Samples for Spin-offs:
1. 93 firms over the period of Jan 1963 to Dec 1981
2. Shortlist of firms with divested property of at least 10% of market value of it’s common stock (Since large spin-offs have larger effect on share prices – study by Miles and Rosenfeld)
3. Elimination of firms with involuntary spin-offs and not listed on NYSE or ASE
The final list consists of 35 firms with 35 spin-off events.
Samples for Sell-offs:
1. Firms engaged in sell-offs over the period of Jan 1969 to Dec 1981
2. List restricted to Large (as followed for spin-off samples) Voluntary sell-offs
The final list consists of 62 firms with 62 sell-off events (11 within 5 years prior to the study and none within 1 yr)
Day 0 - Initial public announcement date of the firm’s intention to divest - taken as the day when it appeared in the Wall Street Journal.
Computation of Abnormal Returns:
Approach – Mean-Adjusted-Return (MAR)
Comparison period = day -150 through day -31 (Chosen to facilitate comparison with ABK study)
Observation period= day -30 through day +30
Step 1: Calculate Average Daily return over the comparison period (CPR). Acts as proxy for Expected daily return for the observation period.
Step 2: Adjusted Daily returns = Daily returns over the observation period - CPR
Step 3: For each trading day of the Observation period, Average Adjusted Return,
Step 4: Cumulative Average Adjusted Return for day d,
Step 5: t-tests performed using the Crude Adjustment Method (CAM) to take into account any cross-sectional dependence of the abnormal returns over the observation period.
Analysis of Abnormal Returns
1. Effect of Event Announcement on shareholders wealth
Salient observations from the analysis are given in the following table:
As per efficient market theory, the announcement affect should be fully and immediately impounded in security prices. Hence, CAAR over day -10 through day 0 is taken as more reliable indicator of the event’s influence than that of day -30 through +30.
The t-tests on the above CAAR observations over the period day -10 through day 0 suggest a statistically significant difference at 1% confidence level in favor of spin-offs.
2. Negative news Vs CAAR during observation period
Simultaneous release of negative news along with the sell-off announcement would tend to dampen the strength of announcement effect. Also, low quality (financial condition) firms’ divestiture announcements are more likely accompanied by less favorable corporate news.
Hypothesis: There will be a positive relationship between an issues S&P rating one year after the event and the magnitude of CAAR over selected intervals.
Testing the Hypothesis:
Step 1: Categorization of firms
Step 2: Comparison of CAARs over selected intervals adjusted for Quality rating for both events
Observations:
1. Wide differential among the CAARs of the three classes for both spin-offs and sell-offs.
2. All three classes of sell-offs produce similar CAARs over the day -1 through day 0
This suggests that, for the high-quality issues, more favorable news is being released during the observation period. And it is concluded that forming subsamples based on S&P rating should yield more valid comparisons between sell-offs and spin-offs.
Conclusion: The above findings suggest that share prices of divesting firms tend to respond more favorably to spin-offs than sell-offs.
Note: As an Issue’s S&P rating may be an imperfect proxy for the type of corporate news released, additional testing using alternative surrogates seems necessary before drawing more definitive conclusions.
Effects on Buyers and Sellers
Investigation of corporate sell-offs is a natural extension to the research performed in the merger studies.
In mergers, The synergistic effects of business combinations can raise the value of corporate resources, thereby increasing shareholders wealth. Studies demonstrate that
1. The shareholders of the acquired firms, on average, incur significant economic gains while those of the acquiring firms tend to break even
2. The combined market value of both firms tends to increase over the announcement period.
Hence, the abnormal returns of the firms that acquired the divested assets are compared with those of the selling firms to determine the extent to which the two firms share in the synergistic effects of the combination.
Sample: 30 selling and 30 acquiring Firms listed on CRSP tape where the purchase price was at least 10% of the market value of acquiring firm’s equity
Observations:
1. CAARs almost identical for selling and acquiring firms over the full observation period
2. Striking similarities between CAARs of the two samples over most of the sub intervals
3. Difference between the samples are statistically not significant
These finding suggest that both the acquiring firm and acquired assets have unique resources that earn positive economic rents when combined with the assets of the other firm.
Conclusions
From the above observations made during the study, the author concludes that
1. The announcement effect of spin-offs has a stronger positive influence on share prices than sell-offs.
2. Sell-off announcements, on an average, are perceived by share holders as a positive NPV transaction.
3. The share holders of both acquiring and divesting firms share nearly equally in the transaction and the transaction’s synergistic effects are not restricted to the selling firm.
References
1. James Miles and James Rosenfeld, “The effect of Spin-off Announcements on Shareholder Wealth,” Journal of Finance 38, December 1993, pp. 1597-1606;
2. Gailen Hite and James Owers, “Security Price Reactions around Corporate Spin-off Announcements,” Journal of Financial Economics 12, December 1983, pp. 409-436;
3. Katherine Schipper and Abbie Smith, “Effects of Recontracting on Shareholder Wealth: The case of voluntary spin-offs,” Journal of Financial Economics 12, December 1983, pp. 437-468,
4. Gordon Alexander, P. George Benson and Joan Kampmeyer, “Investigating the valuation Effects of Announcements of Voluntary Corporate Sell-offs,” Journal of finance 39, June 1984, pp. 503-517.
Summary by
Himagiri Gedela
PGDIE 36, NITIE
A Divestiture is an alteration of the firm’s productive asset portfolio and is accomplished by either spinning-off or selling-off the unwanted assets.
The current paper presents estimates of the effect of voluntary divestiture announcements on shareholder wealth. The purpose of the paper is to provide further evidence regarding the impact of voluntary spin-offs and sell-offs on share holder wealth, in addition to the evidence found from the Earlier studies.
Some earlier studies[1,2,3] suggest that “Spin-off announcements have a positive influence on common-stock prices around the day of the event, while another study[4] suggests a far weaker response which the author contrasts with in the current paper.
The author finds that both types of divestitures have a significantly positive influence on share prices and that the spin-offs “outperform” the sell-offs over the announcement period. Unlike the merger studies that show that acquiring firms tend to “break even” on the transaction, the current study shows that the economic gains to both groups of share holders are virtually identical.
Motives underlying divestitures
The Goal of financial management is to maximize owner wealth; the firm should not undertake a divestiture unless the transaction is expected to benefit its shareholders.
Sell-offs
1. Sales price exceeds the present value of the divested asset’s future Net Cash Flows (NCFs).
2. Desire to sell unprofitable ventures while the buyer has a competitive edge over the seller (e.g., in manufacturing or marketing) which makes future NCFs more from buyers perspective. (Such projects are called as Positive NPV projects for both the parties).
Interpreting divestitures as a positive signal should have positive influence on share prices.
A negative signal, such as a need for cash to maintain corporate solvency, would have opposite effect on share holders wealth.
The signaling effect could either reinforce or dampen the investment effect.
Spin-offs
1. Elimination of negative synergies to increase future NCFs.
2. An alteration of the divested unit’s tax status to increase future NCFs.
3. For proper allocation (improving investment decisions) to enhance the value of divested assets.
4. May erode the position of bondholders causing a wealth transfer to stock holders while leaving the value of the firm unchanged.
5. Creation of publicly traded firms results in new information sources which enable shareholders to closely monitor the activities of managers, thereby reducing agency costs and enhancing share holders wealth.
Research Design
Focus: Comparison of each event’s influence on the stock prices of both the divesting and, in case of sell-offs, acquiring firms.
Samples for Spin-offs:
1. 93 firms over the period of Jan 1963 to Dec 1981
2. Shortlist of firms with divested property of at least 10% of market value of it’s common stock (Since large spin-offs have larger effect on share prices – study by Miles and Rosenfeld)
3. Elimination of firms with involuntary spin-offs and not listed on NYSE or ASE
The final list consists of 35 firms with 35 spin-off events.
Samples for Sell-offs:
1. Firms engaged in sell-offs over the period of Jan 1969 to Dec 1981
2. List restricted to Large (as followed for spin-off samples) Voluntary sell-offs
The final list consists of 62 firms with 62 sell-off events (11 within 5 years prior to the study and none within 1 yr)
Day 0 - Initial public announcement date of the firm’s intention to divest - taken as the day when it appeared in the Wall Street Journal.
Computation of Abnormal Returns:
Approach – Mean-Adjusted-Return (MAR)
Comparison period = day -150 through day -31 (Chosen to facilitate comparison with ABK study)
Observation period= day -30 through day +30
Step 1: Calculate Average Daily return over the comparison period (CPR). Acts as proxy for Expected daily return for the observation period.
Step 2: Adjusted Daily returns = Daily returns over the observation period - CPR
Step 3: For each trading day of the Observation period, Average Adjusted Return,
Step 4: Cumulative Average Adjusted Return for day d,
Step 5: t-tests performed using the Crude Adjustment Method (CAM) to take into account any cross-sectional dependence of the abnormal returns over the observation period.
Analysis of Abnormal Returns
1. Effect of Event Announcement on shareholders wealth
Salient observations from the analysis are given in the following table:
As per efficient market theory, the announcement affect should be fully and immediately impounded in security prices. Hence, CAAR over day -10 through day 0 is taken as more reliable indicator of the event’s influence than that of day -30 through +30.
The t-tests on the above CAAR observations over the period day -10 through day 0 suggest a statistically significant difference at 1% confidence level in favor of spin-offs.
2. Negative news Vs CAAR during observation period
Simultaneous release of negative news along with the sell-off announcement would tend to dampen the strength of announcement effect. Also, low quality (financial condition) firms’ divestiture announcements are more likely accompanied by less favorable corporate news.
Hypothesis: There will be a positive relationship between an issues S&P rating one year after the event and the magnitude of CAAR over selected intervals.
Testing the Hypothesis:
Step 1: Categorization of firms
Step 2: Comparison of CAARs over selected intervals adjusted for Quality rating for both events
Observations:
1. Wide differential among the CAARs of the three classes for both spin-offs and sell-offs.
2. All three classes of sell-offs produce similar CAARs over the day -1 through day 0
This suggests that, for the high-quality issues, more favorable news is being released during the observation period. And it is concluded that forming subsamples based on S&P rating should yield more valid comparisons between sell-offs and spin-offs.
Conclusion: The above findings suggest that share prices of divesting firms tend to respond more favorably to spin-offs than sell-offs.
Note: As an Issue’s S&P rating may be an imperfect proxy for the type of corporate news released, additional testing using alternative surrogates seems necessary before drawing more definitive conclusions.
Effects on Buyers and Sellers
Investigation of corporate sell-offs is a natural extension to the research performed in the merger studies.
In mergers, The synergistic effects of business combinations can raise the value of corporate resources, thereby increasing shareholders wealth. Studies demonstrate that
1. The shareholders of the acquired firms, on average, incur significant economic gains while those of the acquiring firms tend to break even
2. The combined market value of both firms tends to increase over the announcement period.
Hence, the abnormal returns of the firms that acquired the divested assets are compared with those of the selling firms to determine the extent to which the two firms share in the synergistic effects of the combination.
Sample: 30 selling and 30 acquiring Firms listed on CRSP tape where the purchase price was at least 10% of the market value of acquiring firm’s equity
Observations:
1. CAARs almost identical for selling and acquiring firms over the full observation period
2. Striking similarities between CAARs of the two samples over most of the sub intervals
3. Difference between the samples are statistically not significant
These finding suggest that both the acquiring firm and acquired assets have unique resources that earn positive economic rents when combined with the assets of the other firm.
Conclusions
From the above observations made during the study, the author concludes that
1. The announcement effect of spin-offs has a stronger positive influence on share prices than sell-offs.
2. Sell-off announcements, on an average, are perceived by share holders as a positive NPV transaction.
3. The share holders of both acquiring and divesting firms share nearly equally in the transaction and the transaction’s synergistic effects are not restricted to the selling firm.
References
1. James Miles and James Rosenfeld, “The effect of Spin-off Announcements on Shareholder Wealth,” Journal of Finance 38, December 1993, pp. 1597-1606;
2. Gailen Hite and James Owers, “Security Price Reactions around Corporate Spin-off Announcements,” Journal of Financial Economics 12, December 1983, pp. 409-436;
3. Katherine Schipper and Abbie Smith, “Effects of Recontracting on Shareholder Wealth: The case of voluntary spin-offs,” Journal of Financial Economics 12, December 1983, pp. 437-468,
4. Gordon Alexander, P. George Benson and Joan Kampmeyer, “Investigating the valuation Effects of Announcements of Voluntary Corporate Sell-offs,” Journal of finance 39, June 1984, pp. 503-517.
Sunday, August 19, 2007
Self Learning by Students - Assignments 2007
Assignments of the batch are due from today. I informed them that I can read the assignments properly only if they start giving me from today. Early submission have higher allottment of marks for valuation. Around 80 reserch paper summaries, 20 case studies, 20 valuation studies using data up to FY 2006-07 are to be studied by me starting today.
Communication - organization - merger or an alliance
Communication vital when organization makes a big move like merger or an alliance
says Janmejaya Sinha, MD, BCG India, Economic Times, 26 March 2007, page 15
says Janmejaya Sinha, MD, BCG India, Economic Times, 26 March 2007, page 15
Sunday, August 5, 2007
The Great Indian Sell Off - Reasons for Selling the Companies
Corporate Dossier, ET, July 27, 2007, page 1
Vinod Mahanta and TR Vivek, vinod.mahanta@timesgroup.com
Why some Indians are selling their businesses?
"the netrepreneurs only now realise the real worth of what they've built. there is a strong desire to monetise what they own. with globalisation, overseas buyers are willing to open the purse strings where they see value," says Raman Roy who lsold his BPO firm Spectramind to Wipro to start anohter BPO venutre, Quattro.
India Inc has sold more than 200 businesses worth nearly $18 billion in the last twelve months. Some of them are Anchor, Deccan airways, Matrix Labs, BPL Telecom.
Why are companies selling?
Interstingly, the single most common reason for Indian promoter owned businesses seem to be succession and family related problems.
Vinod Mahanta and TR Vivek, vinod.mahanta@timesgroup.com
Why some Indians are selling their businesses?
"the netrepreneurs only now realise the real worth of what they've built. there is a strong desire to monetise what they own. with globalisation, overseas buyers are willing to open the purse strings where they see value," says Raman Roy who lsold his BPO firm Spectramind to Wipro to start anohter BPO venutre, Quattro.
India Inc has sold more than 200 businesses worth nearly $18 billion in the last twelve months. Some of them are Anchor, Deccan airways, Matrix Labs, BPL Telecom.
Why are companies selling?
Interstingly, the single most common reason for Indian promoter owned businesses seem to be succession and family related problems.
Monday, July 23, 2007
Nestle - Mergers and Divestitures - 1997-2007
Mint 24 July 2007 Pages 1 and 24
Brand Cut: After the bings, Nestle on a diet.
Nestle SA CEO Peter Brabeck made two troubling discoveries last year: They were turning out 130,000 variations of their brands, and 30% weren't making money.
After 10 years growth, CEO feels Nestle became unwieldy and slow. Now he is pushing an aggressive plan to jettison weaker brands and simplify the organisation.
Nestle's acquisitions amount to $39.4 billion and divestitures to $5.28 billion during 1997-2007.
some major deals
year acquired company value of acquisition (bil)
2001 Ralston Purina pet food $13
2002 Dreyer's Ice Cream (Part share) 7.9
Chef America snack foods
2003 Powwow water;
Movenpick ice cream 0.8
2005 Remaining portion of Dreyer's 3.0
2006 Novartis's nutrition business
Jenny Craig diet products 4.0
2007 Gerber baby foods 5.6
Nestle cut about 50 of its 1,200 subsidiaries worldwide. Barbeck says the company may eliminate more than 200, in the longer term.
Study of this company's acquisitions, divestitures and reorganisations can be a very useful and interesting case study.
Brand Cut: After the bings, Nestle on a diet.
Nestle SA CEO Peter Brabeck made two troubling discoveries last year: They were turning out 130,000 variations of their brands, and 30% weren't making money.
After 10 years growth, CEO feels Nestle became unwieldy and slow. Now he is pushing an aggressive plan to jettison weaker brands and simplify the organisation.
Nestle's acquisitions amount to $39.4 billion and divestitures to $5.28 billion during 1997-2007.
some major deals
year acquired company value of acquisition (bil)
2001 Ralston Purina pet food $13
2002 Dreyer's Ice Cream (Part share) 7.9
Chef America snack foods
2003 Powwow water;
Movenpick ice cream 0.8
2005 Remaining portion of Dreyer's 3.0
2006 Novartis's nutrition business
Jenny Craig diet products 4.0
2007 Gerber baby foods 5.6
Nestle cut about 50 of its 1,200 subsidiaries worldwide. Barbeck says the company may eliminate more than 200, in the longer term.
Study of this company's acquisitions, divestitures and reorganisations can be a very useful and interesting case study.
Wednesday, July 4, 2007
M & A course 2007 June-Sep Case History Assignments
1. Tata-Corus
2. Hindalco-Novelis
3. Dr. Reddy’s-Beta Pharm
4. Mallya – White and Mackay
5. Suzlon-
6. Vodafone-Hutch Essar
7. Cement
8. Oracle – Iflex
9. Jet airways - Sahara
10. Franklin Templeton – Kothari Pioneer Mutual fund
11. Recent Acquisitions by CISCO
12. Recent Acquisitions by Merrill Lynch
13. Recent Acquisitions by GE
14. Vodafone-Mannesmandemag
15. Arcellor-Mittal
16. Grasim – L&T
17. Tata-VSNL
18. Holcim-ACC
19. Acquisitions by Ranbaxy
20. Arrangement between Mukesh Ambani and Anil Ambani and subsequent mergers and demergers
Areas to be covered as applicable
Initial contacts/discussions
Announcement
Valuation
Synergies claimed
Steps subsequent to announcement of the deal
Structuring of the deal
Financing of the deal
Closure of the deal
Subsequent performance
Advisors to the Buyer and Seller
2. Hindalco-Novelis
3. Dr. Reddy’s-Beta Pharm
4. Mallya – White and Mackay
5. Suzlon-
6. Vodafone-Hutch Essar
7. Cement
8. Oracle – Iflex
9. Jet airways - Sahara
10. Franklin Templeton – Kothari Pioneer Mutual fund
11. Recent Acquisitions by CISCO
12. Recent Acquisitions by Merrill Lynch
13. Recent Acquisitions by GE
14. Vodafone-Mannesmandemag
15. Arcellor-Mittal
16. Grasim – L&T
17. Tata-VSNL
18. Holcim-ACC
19. Acquisitions by Ranbaxy
20. Arrangement between Mukesh Ambani and Anil Ambani and subsequent mergers and demergers
Areas to be covered as applicable
Initial contacts/discussions
Announcement
Valuation
Synergies claimed
Steps subsequent to announcement of the deal
Structuring of the deal
Financing of the deal
Closure of the deal
Subsequent performance
Advisors to the Buyer and Seller
M & A course 2007 June-Sep Session Sequence
Text; Weston, Mithcell and Mulherin
Ch.1. The Takeover Process
Ch.5. Strategic Processes
Ch.6.Theories of Mergers and Tender Offers
Ch.7. The Timing of Merger Activity
Ch.8. Empirical Tests of M & A Performance
Ch.11. corporate Restructuring and Divestiture
Ch.12. Empirical Tests of Corporate Restructuring and Divestitures
Ch.22. Implementation and Management Guides for M & As
Ch.9. Alternative Approaches to Valuation
Ch.10.Increasing the Value of the Organization
Merger and Takeover Mechanics in India
Ch.4. Deal Structuring
Ch.3. Accounting for M&As
Ch.17. International Takeovers and Restructuring
Ch.16. Going Private and Leveraged Buyouts
Ch.19. Takeover Defenses
Recommended for Additional Reading
For broadening the knowledge:
1. Wyatt & Kieso, Business Combinations: Planning and Action, International Text Book company, 1969
2. Weston & Samuel C. Weaver, Mergers and Acquisitions, Tata Mcgraw Hill, 2001
3. James W. Bradley and Donald H. Korn, Acquisition and Corporate Development, Lexington Books, D.C. Heath & Co., Lexington, 1981 ( a book by Arthur D. Little Executives)
4. P.S. Sudarsanam, The Essence of Mergers and Acquisitions, Prentice Hall of India Private Limited, New Delhi, 1997
5. Fred Weston et al., Takeovers, Restructuring, and Corporate governance, second edition
For deepening the knowledge
1. Book on Income tax of India,
2. Company Act of India,
3. Advanced Accounting by Maheshwari and Maheshwari
4. Valuation by Copeland,
5. Book on Joint Ventures by Yoz and Hamel,
6. M&A:A Practical Guide to Doing the Deal by Jeffrey Hooke,
7. Strategic Management:Concepts and Cases by Thompson and Strickland 13th edition, 8. Mergers et al, Issues, Implications, and Case Laws in Corporate Restructuring by S. Ramanujam.
9. Schweiger, David M., M&A Integration: A Framework fo Executives and Managers, McGraw-Hill, New York, 2002
10. Research papers given in the references by Weston, Mitchell and Mulherin
Ch.1. The Takeover Process
Ch.5. Strategic Processes
Ch.6.Theories of Mergers and Tender Offers
Ch.7. The Timing of Merger Activity
Ch.8. Empirical Tests of M & A Performance
Ch.11. corporate Restructuring and Divestiture
Ch.12. Empirical Tests of Corporate Restructuring and Divestitures
Ch.22. Implementation and Management Guides for M & As
Ch.9. Alternative Approaches to Valuation
Ch.10.Increasing the Value of the Organization
Merger and Takeover Mechanics in India
Ch.4. Deal Structuring
Ch.3. Accounting for M&As
Ch.17. International Takeovers and Restructuring
Ch.16. Going Private and Leveraged Buyouts
Ch.19. Takeover Defenses
Recommended for Additional Reading
For broadening the knowledge:
1. Wyatt & Kieso, Business Combinations: Planning and Action, International Text Book company, 1969
2. Weston & Samuel C. Weaver, Mergers and Acquisitions, Tata Mcgraw Hill, 2001
3. James W. Bradley and Donald H. Korn, Acquisition and Corporate Development, Lexington Books, D.C. Heath & Co., Lexington, 1981 ( a book by Arthur D. Little Executives)
4. P.S. Sudarsanam, The Essence of Mergers and Acquisitions, Prentice Hall of India Private Limited, New Delhi, 1997
5. Fred Weston et al., Takeovers, Restructuring, and Corporate governance, second edition
For deepening the knowledge
1. Book on Income tax of India,
2. Company Act of India,
3. Advanced Accounting by Maheshwari and Maheshwari
4. Valuation by Copeland,
5. Book on Joint Ventures by Yoz and Hamel,
6. M&A:A Practical Guide to Doing the Deal by Jeffrey Hooke,
7. Strategic Management:Concepts and Cases by Thompson and Strickland 13th edition, 8. Mergers et al, Issues, Implications, and Case Laws in Corporate Restructuring by S. Ramanujam.
9. Schweiger, David M., M&A Integration: A Framework fo Executives and Managers, McGraw-Hill, New York, 2002
10. Research papers given in the references by Weston, Mitchell and Mulherin
Wednesday, June 20, 2007
Drop in valuation makes BPOs attractive to PEs
Et, 20-6-2007, Page 5
Valuations of Indian BPO firms, among the most expensive globally, have undergone a correction since beginning of the year making them more attractive to PE players looking for BPO buys in the country.
WNS, India's largest third-party BPO after Genpact, is currently valued at 44 times its earnings, at a significant discount to the price it used to command six months ago.
Valuations peaked in February this year. current valuations are between 2.5 to 4.5 times the sales, and 15-20 times the EBDITA depending on the size, margins and growth prospects. Other factors that determine the valuation are voice and non-voice mix and domestic and international BPO business mix.
Valuations of Indian BPO firms, among the most expensive globally, have undergone a correction since beginning of the year making them more attractive to PE players looking for BPO buys in the country.
WNS, India's largest third-party BPO after Genpact, is currently valued at 44 times its earnings, at a significant discount to the price it used to command six months ago.
Valuations peaked in February this year. current valuations are between 2.5 to 4.5 times the sales, and 15-20 times the EBDITA depending on the size, margins and growth prospects. Other factors that determine the valuation are voice and non-voice mix and domestic and international BPO business mix.
Acquisition and Divestment of a Different Type
Mumbai based IT company GTL has enterred into an agreement with ICICI Bank and Spanco Telesystems to lease out its BPO assets for 25 years for Rs 253 croes. GTL has two BPO facilties with a combined capacity of 1500 seats and 1.5 lakh sq ft area. As it is a lease agreement, GTL will keep its real estate and also will continue to provide instrastructure management, telecom services, facilities management and offer other professional services to these BPOs.
Tuesday, June 19, 2007
Seeds of a credit crunch growing a global LBO loan market
The Economic Times (ET), 20-6-2007, Page 10
Earlier banks used to finance LBOs/buyouts mainly with loans on their balance sheets. But they are now packaging and selling those loans to investors using instruments called 'collateralised loan obligations" (CLOs) that group various loans together to diversify risk.
In the old days of relationship banking, banks relied on credit quality control and huge balance sheets to ride out any problems, but CLO investors may be more short-term oriented and will dump their securities in case of underperformance and problems.
Collateralised Debt Obligations (CDOs)a broader classificationo of the structures, have been especially voracious buyers of CLOs. Total CDO sales grew to more than $300 billion, a record doubling in size in less than two years.
Anthony Schultz, a portfolio manager at Mendon Capital, says you're clsoe to the peak of the cycle and for new CDOs coming to market, the end buyers are going to say, 'Ijust took a loss on these things and you want to sell me more?'. The credit crunch will begin then.
Earlier banks used to finance LBOs/buyouts mainly with loans on their balance sheets. But they are now packaging and selling those loans to investors using instruments called 'collateralised loan obligations" (CLOs) that group various loans together to diversify risk.
In the old days of relationship banking, banks relied on credit quality control and huge balance sheets to ride out any problems, but CLO investors may be more short-term oriented and will dump their securities in case of underperformance and problems.
Collateralised Debt Obligations (CDOs)a broader classificationo of the structures, have been especially voracious buyers of CLOs. Total CDO sales grew to more than $300 billion, a record doubling in size in less than two years.
Anthony Schultz, a portfolio manager at Mendon Capital, says you're clsoe to the peak of the cycle and for new CDOs coming to market, the end buyers are going to say, 'Ijust took a loss on these things and you want to sell me more?'. The credit crunch will begin then.
Include marketing expert in merger negotiating/process team
Mint June 20, 2007, page 21
Article by Dr. Richard Etteson, Professor, Thunderbird School of global Management, Glendale, Arizona and M.r Jonathan Knowles, founder and CEO of type 2 consulting in New York.
Our research with managers involved in 200-plus M&As shows that companies don't think much about how to present the merged company to customers, employees and investors. Including a senior marketer at the M&A table will address this blind spot-and also generate three benefits for the negotiating team.
Selling the brand: marketer helps to ensure that the new entity's corporate brand is chosen based on strategy rather than expediency and would explicitly consider how the company can communicate the benefits of merger to customers, employees and investors.
Finding key assets: A marketer in the merger team would look at "relational assets" that drive cash flow, such as corporate reputation, goodwill and the brand itself-vitally important factors that often get overlooked in a merger deal.
Looking beyond deal breakers: A senior marketer can look at "deal makers" - factors that will enhance the chances of success after merger, such as the strategic use of the corporate brand. the marketer would focus attention on ways in which the new company could deliver more value to customers.
Article by Dr. Richard Etteson, Professor, Thunderbird School of global Management, Glendale, Arizona and M.r Jonathan Knowles, founder and CEO of type 2 consulting in New York.
Our research with managers involved in 200-plus M&As shows that companies don't think much about how to present the merged company to customers, employees and investors. Including a senior marketer at the M&A table will address this blind spot-and also generate three benefits for the negotiating team.
Selling the brand: marketer helps to ensure that the new entity's corporate brand is chosen based on strategy rather than expediency and would explicitly consider how the company can communicate the benefits of merger to customers, employees and investors.
Finding key assets: A marketer in the merger team would look at "relational assets" that drive cash flow, such as corporate reputation, goodwill and the brand itself-vitally important factors that often get overlooked in a merger deal.
Looking beyond deal breakers: A senior marketer can look at "deal makers" - factors that will enhance the chances of success after merger, such as the strategic use of the corporate brand. the marketer would focus attention on ways in which the new company could deliver more value to customers.
Friday, June 15, 2007
deal book research
Mint 15-6-2007
Page 1
Merrill lynch invests in copal partners, a M&A research outfit based in UKbut maintaining a research staff of about 540 near New Delhi. Merrill outsources work to this firm. Copal is now diversifying into stock research in non US markets and credit research.
Raj Khosla, CEO and paertner Joel Perlman started the firm
Page 1
Merrill lynch invests in copal partners, a M&A research outfit based in UKbut maintaining a research staff of about 540 near New Delhi. Merrill outsources work to this firm. Copal is now diversifying into stock research in non US markets and credit research.
Raj Khosla, CEO and paertner Joel Perlman started the firm
Sunday, June 3, 2007
Book - The Art of Negotiating - Gerard Nierenberg
today I completed reading the book The Art of Negotiating by Gerard I. Nierenberg. This is one of the 22 books that I plan to read to support my teaching of M&A.
The contents of the Book are
I. On Negotiating
II. The cooperative Process
III. People
IV. Preparing for negotiation
v. Hidden Assumptions
VI. What Motivates us?
VII. The Need Theory of Motivation.
VIII. How to Recognize Needs
IX Negotiating Techniques
X. Life Illustrations
The chapter VIII How to recognize needs? is an interesting chapter. Some interesting statement of the authors are:
"To know what your opposer is thinking and striving for, youmust turn detective, you must apply various methods and techniques to your primary objective of recognizing his needs."
Ask questions
Make affirmative statements
Machiavelli offers sound advice on how not to use statement: 'Ihold it to be a proof of great prudence for men to abstain from threats and insulting words towards any one, for neither...diminishes the strength of the enemy; but the one makes him more cautious, and the other increases his hatred of you, and makes him more persevering in his efforts to injure you."
Become a good listener
Observe and understand nonverbal communication
The contents of the Book are
I. On Negotiating
II. The cooperative Process
III. People
IV. Preparing for negotiation
v. Hidden Assumptions
VI. What Motivates us?
VII. The Need Theory of Motivation.
VIII. How to Recognize Needs
IX Negotiating Techniques
X. Life Illustrations
The chapter VIII How to recognize needs? is an interesting chapter. Some interesting statement of the authors are:
"To know what your opposer is thinking and striving for, youmust turn detective, you must apply various methods and techniques to your primary objective of recognizing his needs."
Ask questions
Make affirmative statements
Machiavelli offers sound advice on how not to use statement: 'Ihold it to be a proof of great prudence for men to abstain from threats and insulting words towards any one, for neither...diminishes the strength of the enemy; but the one makes him more cautious, and the other increases his hatred of you, and makes him more persevering in his efforts to injure you."
Become a good listener
Observe and understand nonverbal communication
Monday, May 28, 2007
Japan: Japan’s New Triangular Merger Rules – Acquisition of Japanese Companies Through Share Exchang
Effective May 1, 2007, Japan’s new Company Law rules will allow foreign companies to use their shares in acquiring Japanese companies. While the new law and related regulatory changes are intended to facilitate cross-border M&A activity, non-Japanese acquirers interested in using triangular mergers will need to consider various business, tax and other legal issues when planning to pursue this type of transaction.
The new form of acquisition is called "triangular mergers" (sankaku gappei). As the name suggests, this transaction scheme will allow a non-Japanese company ("Foreign Acquirer") with a Japanese subsidiary ("Japanese Subsidiary") to acquire a Japanese target company ("Target") by having such Target merge with and into the Japanese Subsidiary. In such mergers, the consideration given to the shareholders of the Target can be in the form of cash or other assets, including shares of the Foreign Acquirer.
For more information http://www.mondaq.com/i_article.asp_Q_articleid_E_48012_A_rss_E_0
The new form of acquisition is called "triangular mergers" (sankaku gappei). As the name suggests, this transaction scheme will allow a non-Japanese company ("Foreign Acquirer") with a Japanese subsidiary ("Japanese Subsidiary") to acquire a Japanese target company ("Target") by having such Target merge with and into the Japanese Subsidiary. In such mergers, the consideration given to the shareholders of the Target can be in the form of cash or other assets, including shares of the Foreign Acquirer.
For more information http://www.mondaq.com/i_article.asp_Q_articleid_E_48012_A_rss_E_0
Thursday, May 24, 2007
SEBI's role in Takeover Price
In Letters to the Editor, ET,Page 14 THURSDAY, MAY 24, 2007
A clarification
[ THURSDAY, MAY 24, 2007 02:31:00 AM]
Apropos of the news item captioned “Sebi cannot decide takeover price” (ET, May 18), it needs to be pointed out that the heading of the news item is grossly misleading and wrong.
The caption apparently suggests that Sebi cannot decide takeover price and that the regulator has no role to play in the valuation of shares under takeover scheme.
However, the Supreme court of May 16, 2007 in the matter of H L Somany and others v/s. Sebi makes no such mention.
On the contrary, as has been rightly mentioned in the text of the news item, the Court has observed that Sebi has to be satisfied that the offer made is reasonable and fair, and in the interest of the shareholders and that as the regulator Sebi is not bound to accept the offer price which is required to be incorporated in the public offer, if it suspects the offer price does not represent the fair value of the shares determined in accordance with Regulation 20 (5).
Amrita Shukla
Manager (Communications), SEBI
A clarification
[ THURSDAY, MAY 24, 2007 02:31:00 AM]
Apropos of the news item captioned “Sebi cannot decide takeover price” (ET, May 18), it needs to be pointed out that the heading of the news item is grossly misleading and wrong.
The caption apparently suggests that Sebi cannot decide takeover price and that the regulator has no role to play in the valuation of shares under takeover scheme.
However, the Supreme court of May 16, 2007 in the matter of H L Somany and others v/s. Sebi makes no such mention.
On the contrary, as has been rightly mentioned in the text of the news item, the Court has observed that Sebi has to be satisfied that the offer made is reasonable and fair, and in the interest of the shareholders and that as the regulator Sebi is not bound to accept the offer price which is required to be incorporated in the public offer, if it suspects the offer price does not represent the fair value of the shares determined in accordance with Regulation 20 (5).
Amrita Shukla
Manager (Communications), SEBI
RSM EquiCo
Hindustan Times, 23 May 2007 page 20
RSM EQUICO Capital markets LLC, the third largest investment banking player ni the sub-$100 milion space, is peddling a few companies to prospective indian buyers.RSM is a subsidiary of the US based financial services group H&R Block Inc. In overall ranking of US based investment bankers, RSM ranks 16 by the number of deals struck in 2006. The company has a presence in India through a sister concern RSM McGladrey which does research for the group. Akhilesh Ayear is the coo of the investment banking group.
RSM had recently advised in Batliboi's takeover of US based Quickmill
RSM EQUICO Capital markets LLC, the third largest investment banking player ni the sub-$100 milion space, is peddling a few companies to prospective indian buyers.RSM is a subsidiary of the US based financial services group H&R Block Inc. In overall ranking of US based investment bankers, RSM ranks 16 by the number of deals struck in 2006. The company has a presence in India through a sister concern RSM McGladrey which does research for the group. Akhilesh Ayear is the coo of the investment banking group.
RSM had recently advised in Batliboi's takeover of US based Quickmill
Tat Corus Fund raising plans
From
http://portal.bsnl.in/business.asp?intNewsId=90818&strDisplayStyle=block&intDaysBefore=4
18 Apr 2007 08:58:34
Tatas plan fund raising mix for Corus
MUMBAI: Tata Steel has opted for a mix of domestic rights, preference shares and overseas equity in a delicate balancing act aimed at ensuring financial stability and enough room for meeting future growth targets.
India's oldest steel company, which earlier this month became the fifth largest in the world after buying Corus, will issue shares on a rights basis to raise about $862 million while about $1 billion will come from another rights issue of convertible preference shares. The company will also mop up about $500 million either through an ADR or a GDR issue.
The money will be used to pay for the acquisition of Corus, which at $13.7 billion is the biggest overseas takeover by any Indian company. Of the cash value of $12.9 billion, Tata Steel has already mobilised $6.1 billion through a mixture of high-yield, mezzanine and long-term funding in the UK-based acquisition vehicle, Tata Steel UK.
The company has also invested $1.8 billion in a Singapore SPV using its cash reserves. This SPV, on its part, has raised $2.66 billion through bridge loans and will also use the $2.3 billion proposed to be raised through the just-announced transactions to fund the Corus deal.
Tata Steel has tried to ensure a balanced financial structure given the large nature of the Corus deal and the concerns of several investors about the costs involved. On January 31, Tata Steel shares had crashed after the company announced the winning bid for Corus at 608 pence per share as investors fretted about how the company is going to fund it.
Before the board meeting on Tuesday, the company had focussed on two issues - Ensure that its debt-equity ratio does not get out of control and leave enough flexibility for future fund-raising.
Too much of debt was, therefore, ruled out. Only 12% of the total amount of $4.1 billion that Tata Steel will invest in its Singapore-based subsidiary Tata Steel Asia Holdings, has been mopped up through debt. Also, after having borrowed $6.l billion in the UK SPV, the company could not afford to take on extra borrowing as it would skew its consolidated debt equity ratio.
The debt-equity ratio of the stand-alone company was 0.3. It made no sense to disturb it given that Tata Steel has mega expansion plans in the coming years. Equity, therefore, was the preferred option. However, even this had to be done in a staggered manner to ensure that investors don't suffer from a sudden and drastic dilution.
The steel major will raise $862 million from rights issue of equity shares to the shareholders in the ratio of 1:5 at a price of Rs 300 per share. This issue will be followed by an issue of convertible preference shares in the ratio of 1:7 worth about $1 billion. This will have a coupon rate of 2% with conversion into equity shares after two years at a price range of Rs 500-600 per share, as may be determined at the time of the issue.
The company will immediately follow it up with a foreign issue, either a GDR or an ADR, to raise $500 million. Managing director B Muthuraman refused to reveal where the money will be raised from, saying it "will depend on market conditions".
Initial reactions from analysts were cautiously positive. "The pricing of the rights issue is attractive and the whole funding is a good ploy to get the investors," said an analyst with a leading foreign brokerage house. Tata Steel shares ended the day 0.89% lower at Rs 528.6.
Attracting the "investor on the street", seems to be part of the rationale behind the fund-raising exercise. The equity dilution is spread out over three years. The other part is to keep the debt-equity ratio at a level that will give the company enough room to finance its multi-billion dollar greenfield and brownfield projects in the country.
"As of now, the stand-alone debt-equity ratio stands at 0.3%, and we are looking at a consolidated 1:1 ratio in the long term," said Koushik Chatterjee, vice-president (finance), Tata Steel. He did concede that initially the ratio might be "a little higher".
The rights and the foreign issue will dilute the capital of the company by 33% over three years, meaning an addition of Rs 280 crore to the current Rs 609 crore. The total debt of the two combine stands at about $8 billion, including $6.1 billion of Corus. The first rights issue would be done within four months, said Mr Chatterjee.
Tata Steel had to keep in mind other factors, too. Though the steel industry is on the upswing and is expected to remain so for some time, sudden unforeseen developments are always common. For instance, the cash value of the Corus deal has increased to $12.9 billion from $12.1 billion due to an increase of $800 million in the working capital for the Anglo-Dutch steelmaker.
From the initial price tag of about $8 billion, Corus' valuation increased after an intense race between Tata Steel and its Brazilian rival Companhia Siderurgica Nacional. At the end of the auction in January, the tag got heavier by $4 billion, leaving investors running scared and Tata Steel stock falling more than 10%.
Though Mr Muthuraman gave a positive outlook of two years for the global steel industry, analysts warn that most of the success of the fund-raising, given the high equity part, will depend on steel prices. "Though the structure keeps in mind the debt equity ratio, it perhaps is a little vulnerable to market conditions," said a senior official of a financial advisory firm.
Apart from the $3.3 billion that will be raised through the three instruments, the company has already mobilised $1.8 billion, making up for the $4.1 billion equity contribution of Tata Steel in the acquisition. Of the $1.8 billion, about $700 million comes from internal accruals, $500 million from external commercial borrowings and about $640 million was raised earlier through preferential issues of equity shares to Tata Sons.
"The funding has been rebalanced on the basis of availability. Unlike in the case of the acquisitions of NatSteel and Millennium Steel, which were financed through our internal accruals, here the structure is different. If you have a business of this size, you have to ensure the long-term viability," said Mr Chatterjee.
Details are being worked out, pointed out Mr Chatterjee, on the $1.41-billion long-term capital funding and the $1.25-b quasi-equity funding at Singapore subsidiary, Tata Steel Asia. "Thus, the debt equity ratio of the acquisition is almost 1:1," he noted.
http://portal.bsnl.in/business.asp?intNewsId=90818&strDisplayStyle=block&intDaysBefore=4
18 Apr 2007 08:58:34
Tatas plan fund raising mix for Corus
MUMBAI: Tata Steel has opted for a mix of domestic rights, preference shares and overseas equity in a delicate balancing act aimed at ensuring financial stability and enough room for meeting future growth targets.
India's oldest steel company, which earlier this month became the fifth largest in the world after buying Corus, will issue shares on a rights basis to raise about $862 million while about $1 billion will come from another rights issue of convertible preference shares. The company will also mop up about $500 million either through an ADR or a GDR issue.
The money will be used to pay for the acquisition of Corus, which at $13.7 billion is the biggest overseas takeover by any Indian company. Of the cash value of $12.9 billion, Tata Steel has already mobilised $6.1 billion through a mixture of high-yield, mezzanine and long-term funding in the UK-based acquisition vehicle, Tata Steel UK.
The company has also invested $1.8 billion in a Singapore SPV using its cash reserves. This SPV, on its part, has raised $2.66 billion through bridge loans and will also use the $2.3 billion proposed to be raised through the just-announced transactions to fund the Corus deal.
Tata Steel has tried to ensure a balanced financial structure given the large nature of the Corus deal and the concerns of several investors about the costs involved. On January 31, Tata Steel shares had crashed after the company announced the winning bid for Corus at 608 pence per share as investors fretted about how the company is going to fund it.
Before the board meeting on Tuesday, the company had focussed on two issues - Ensure that its debt-equity ratio does not get out of control and leave enough flexibility for future fund-raising.
Too much of debt was, therefore, ruled out. Only 12% of the total amount of $4.1 billion that Tata Steel will invest in its Singapore-based subsidiary Tata Steel Asia Holdings, has been mopped up through debt. Also, after having borrowed $6.l billion in the UK SPV, the company could not afford to take on extra borrowing as it would skew its consolidated debt equity ratio.
The debt-equity ratio of the stand-alone company was 0.3. It made no sense to disturb it given that Tata Steel has mega expansion plans in the coming years. Equity, therefore, was the preferred option. However, even this had to be done in a staggered manner to ensure that investors don't suffer from a sudden and drastic dilution.
The steel major will raise $862 million from rights issue of equity shares to the shareholders in the ratio of 1:5 at a price of Rs 300 per share. This issue will be followed by an issue of convertible preference shares in the ratio of 1:7 worth about $1 billion. This will have a coupon rate of 2% with conversion into equity shares after two years at a price range of Rs 500-600 per share, as may be determined at the time of the issue.
The company will immediately follow it up with a foreign issue, either a GDR or an ADR, to raise $500 million. Managing director B Muthuraman refused to reveal where the money will be raised from, saying it "will depend on market conditions".
Initial reactions from analysts were cautiously positive. "The pricing of the rights issue is attractive and the whole funding is a good ploy to get the investors," said an analyst with a leading foreign brokerage house. Tata Steel shares ended the day 0.89% lower at Rs 528.6.
Attracting the "investor on the street", seems to be part of the rationale behind the fund-raising exercise. The equity dilution is spread out over three years. The other part is to keep the debt-equity ratio at a level that will give the company enough room to finance its multi-billion dollar greenfield and brownfield projects in the country.
"As of now, the stand-alone debt-equity ratio stands at 0.3%, and we are looking at a consolidated 1:1 ratio in the long term," said Koushik Chatterjee, vice-president (finance), Tata Steel. He did concede that initially the ratio might be "a little higher".
The rights and the foreign issue will dilute the capital of the company by 33% over three years, meaning an addition of Rs 280 crore to the current Rs 609 crore. The total debt of the two combine stands at about $8 billion, including $6.1 billion of Corus. The first rights issue would be done within four months, said Mr Chatterjee.
Tata Steel had to keep in mind other factors, too. Though the steel industry is on the upswing and is expected to remain so for some time, sudden unforeseen developments are always common. For instance, the cash value of the Corus deal has increased to $12.9 billion from $12.1 billion due to an increase of $800 million in the working capital for the Anglo-Dutch steelmaker.
From the initial price tag of about $8 billion, Corus' valuation increased after an intense race between Tata Steel and its Brazilian rival Companhia Siderurgica Nacional. At the end of the auction in January, the tag got heavier by $4 billion, leaving investors running scared and Tata Steel stock falling more than 10%.
Though Mr Muthuraman gave a positive outlook of two years for the global steel industry, analysts warn that most of the success of the fund-raising, given the high equity part, will depend on steel prices. "Though the structure keeps in mind the debt equity ratio, it perhaps is a little vulnerable to market conditions," said a senior official of a financial advisory firm.
Apart from the $3.3 billion that will be raised through the three instruments, the company has already mobilised $1.8 billion, making up for the $4.1 billion equity contribution of Tata Steel in the acquisition. Of the $1.8 billion, about $700 million comes from internal accruals, $500 million from external commercial borrowings and about $640 million was raised earlier through preferential issues of equity shares to Tata Sons.
"The funding has been rebalanced on the basis of availability. Unlike in the case of the acquisitions of NatSteel and Millennium Steel, which were financed through our internal accruals, here the structure is different. If you have a business of this size, you have to ensure the long-term viability," said Mr Chatterjee.
Details are being worked out, pointed out Mr Chatterjee, on the $1.41-billion long-term capital funding and the $1.25-b quasi-equity funding at Singapore subsidiary, Tata Steel Asia. "Thus, the debt equity ratio of the acquisition is almost 1:1," he noted.
Tata Corus Integration
From http://portal.bsnl.in/business.asp?intNewsId=90818&strDisplayStyle=block&intDaysBefore=4
18 Apr 2007 08:58:34
"The transaction stands completed on April 2," announced Mr Muthuraman. "We have already started the integration process and some 15-18 synergy teams, with about two members each from Corus and Tata Steel, have been formed. We estimate to save more than $350 million we had earlier expected from synergy of the acquisition."
Source: The Economic Times
18 Apr 2007 08:58:34
"The transaction stands completed on April 2," announced Mr Muthuraman. "We have already started the integration process and some 15-18 synergy teams, with about two members each from Corus and Tata Steel, have been formed. We estimate to save more than $350 million we had earlier expected from synergy of the acquisition."
Source: The Economic Times
Monday, May 21, 2007
NTN(MA) 22 May 2007
The Economic Times
22 May 2007
page 1
Sun phrama buys Taro for $454 million. Sun will pay $230 million to Taro shareholders and assume about $234 million of debt, whihc it will refinance at cheaper interest rates.
Last year, Dr Reddy;'s had bought out Germany's Betapham for $565 million in the largest overseas acquisition of a pharma company.
US based investment banking firm Greenhill & co, advised Sun pharma on the deal.
Page 8
Goldman Sachs group Inc teamed up with TPG Inc to buy Alltel Corp for about $24.7 billion in the largest leveraged buyout of a telecommunications company.
Hologic to take over Cytyc for $6.2 billion. Hologic said the deal would make it one of the largest companies in the world focused on advanced technology in women's health.
Sabic Basic Industries, based in Riyadh, Saudi Arabia, the world's biggest chemical company by market value, agreed to buy General Electric's plastics unit for $11.6 billion.
Terra firma to buy EMI for $4.7 billion.
Merrill to acquire stake in Goodman's GSO Hedge Fund. GSO Capital manages $8 billion and employs 115 people in New York, London, Houston and Los Angeles.
page 10
Sun Prama's found its shine in Taro acquisition. The valuation is at 1.5 times Taro's sales.Sun will fund the deal from proceeds of its foreign currency convertible bonds and internal acrruals.
Page 14
Sun Pharam to provide $45 m interim equity financing to Taro. the Israeli firm had begun takeover talks two months bnack following protracted losses and a deepening liquidity crunch. It had solicited offers from more than 20 potential bidders.
The deal however faces a challenge from minority shareholders. Franklin Advisers Inc. and Templeton Assets Management Ltd., whihc together own 9% of Taro, have filed a case in Tel Aviv seeking to prevent any transaction by Taro that could hurt minority shareholders.
Taro intends to contest the case vigorously as sun Pharma and Taro believe that the proceedings initiated by FRanklin and Templeton are without merit.
Kalpataru Power Transmission (KPTL) has acquired a 65% equity stake in Shree Shuham Logistics (SSL), a company engaged in warehousing activities in Rajastan
Page 20
Stanchart calls off bank of Bahrain deal. Stanchart had signed a nonbinding agreement with BBK in June 2005. They received an inprinciple approval from RBI. The bank signed a final agreement on February 28, 2006 and had approached the regulator. However, the central bank said that it would allow Stanchart to only takeover the busines and not the licences.
Mint 22 May 2007
Page 4
Sunphara to acquire Israel's Taro for $454 Mn
Page 5
UB Group begins integration exercise. UB has shifted two of its key officials Alok gupta and Ashok roy to Glasgow.Roy will be in charge of W&M's finances, while Gupta will look after marketing and brand operations United Spirits Great Britain Ltd., a 100% subsidiairy of United Spirits Ldt, acquired W&M in a leveraged buyout for which ICICI Bank and Citibank funded 635 million pound.
22 May 2007
page 1
Sun phrama buys Taro for $454 million. Sun will pay $230 million to Taro shareholders and assume about $234 million of debt, whihc it will refinance at cheaper interest rates.
Last year, Dr Reddy;'s had bought out Germany's Betapham for $565 million in the largest overseas acquisition of a pharma company.
US based investment banking firm Greenhill & co, advised Sun pharma on the deal.
Page 8
Goldman Sachs group Inc teamed up with TPG Inc to buy Alltel Corp for about $24.7 billion in the largest leveraged buyout of a telecommunications company.
Hologic to take over Cytyc for $6.2 billion. Hologic said the deal would make it one of the largest companies in the world focused on advanced technology in women's health.
Sabic Basic Industries, based in Riyadh, Saudi Arabia, the world's biggest chemical company by market value, agreed to buy General Electric's plastics unit for $11.6 billion.
Terra firma to buy EMI for $4.7 billion.
Merrill to acquire stake in Goodman's GSO Hedge Fund. GSO Capital manages $8 billion and employs 115 people in New York, London, Houston and Los Angeles.
page 10
Sun Prama's found its shine in Taro acquisition. The valuation is at 1.5 times Taro's sales.Sun will fund the deal from proceeds of its foreign currency convertible bonds and internal acrruals.
Page 14
Sun Pharam to provide $45 m interim equity financing to Taro. the Israeli firm had begun takeover talks two months bnack following protracted losses and a deepening liquidity crunch. It had solicited offers from more than 20 potential bidders.
The deal however faces a challenge from minority shareholders. Franklin Advisers Inc. and Templeton Assets Management Ltd., whihc together own 9% of Taro, have filed a case in Tel Aviv seeking to prevent any transaction by Taro that could hurt minority shareholders.
Taro intends to contest the case vigorously as sun Pharma and Taro believe that the proceedings initiated by FRanklin and Templeton are without merit.
Kalpataru Power Transmission (KPTL) has acquired a 65% equity stake in Shree Shuham Logistics (SSL), a company engaged in warehousing activities in Rajastan
Page 20
Stanchart calls off bank of Bahrain deal. Stanchart had signed a nonbinding agreement with BBK in June 2005. They received an inprinciple approval from RBI. The bank signed a final agreement on February 28, 2006 and had approached the regulator. However, the central bank said that it would allow Stanchart to only takeover the busines and not the licences.
Mint 22 May 2007
Page 4
Sunphara to acquire Israel's Taro for $454 Mn
Page 5
UB Group begins integration exercise. UB has shifted two of its key officials Alok gupta and Ashok roy to Glasgow.Roy will be in charge of W&M's finances, while Gupta will look after marketing and brand operations United Spirits Great Britain Ltd., a 100% subsidiairy of United Spirits Ldt, acquired W&M in a leveraged buyout for which ICICI Bank and Citibank funded 635 million pound.
Sunday, May 20, 2007
NTN(MA) 21 May 2007
The Economic Times
19 May 2007
page 1
Citi arm arm to buy 85% in Sharekhan for Rs.650 cr. Citigroup Venture Capital (CVC) is believed to have bought 85% stake in retail brokerage Sharekhan for roughly Rs 650 crore. Mape advisory is Sharekhan's advisor in the deal.
In 2006, BNP Paribas paid Rs. 207 cr to buy a 33% stajke in retail brokerage house geojit Securities valuing the brokerage ast around Rs 620 crore. In the pat few years, private equity players have picked up stakes in brokerages such as Motilal Osswal, Edelweiss and Anand Rathi Securities.
Sharekhan has presence across 150 cities with over 100m branches and 310 franchiees.
The Economic Times
21 May 2007
Page 11
Ratan Tata to head corus merger panel
Tata Steel has formed a seven member integration committee to spearhead its union with corus group.
Page 14
Unicredit to buy Capitalia for $30b, create 5th largest bank. It will be the biggest bank in 13 nations using the euro
Mint 21 May 2007
page 18
Choosing applicable laws in international arbitration. A useful article for M&A students.
Page 19
Mirocsoft Corp.'s $6 billion deal to buy an online specialist called aQuantivi Inc. put sinto high gear a race between Madison Avenue and a new guard of technology businesses that are trying to dominate the unbridled market in brokering internet advertisements. Article has descriptions has a number of deals in this segment.
19 May 2007
page 1
Citi arm arm to buy 85% in Sharekhan for Rs.650 cr. Citigroup Venture Capital (CVC) is believed to have bought 85% stake in retail brokerage Sharekhan for roughly Rs 650 crore. Mape advisory is Sharekhan's advisor in the deal.
In 2006, BNP Paribas paid Rs. 207 cr to buy a 33% stajke in retail brokerage house geojit Securities valuing the brokerage ast around Rs 620 crore. In the pat few years, private equity players have picked up stakes in brokerages such as Motilal Osswal, Edelweiss and Anand Rathi Securities.
Sharekhan has presence across 150 cities with over 100m branches and 310 franchiees.
The Economic Times
21 May 2007
Page 11
Ratan Tata to head corus merger panel
Tata Steel has formed a seven member integration committee to spearhead its union with corus group.
Page 14
Unicredit to buy Capitalia for $30b, create 5th largest bank. It will be the biggest bank in 13 nations using the euro
Mint 21 May 2007
page 18
Choosing applicable laws in international arbitration. A useful article for M&A students.
Page 19
Mirocsoft Corp.'s $6 billion deal to buy an online specialist called aQuantivi Inc. put sinto high gear a race between Madison Avenue and a new guard of technology businesses that are trying to dominate the unbridled market in brokering internet advertisements. Article has descriptions has a number of deals in this segment.
Thursday, May 17, 2007
NTN (News to Note) 18-5-2007
Mint 16 May 2007
Page 1
HDFC buys Chubb out of JV HDFC Chubb General Insurance Co.
Page 18
Thompson, Reuters agree on terms of merger
Page 19
After pact to get rid of Chrysler, Daimler turns to other challenges
Mint 17 May 2007
Page 1
Mallya pays $1.18 bn(Pound595 million or Rs 4,797 crore) for Whyte & Mackay. The deal is the fourth-biggest overseas deal announced by an Indian company this year. (What are the other three - Tata-Corus, Hindalco-Novelis, Third one?).
Page 7
Will Chrysler's next suitor be from India? Commentary by David Lazarus
Page 11
Oracle snaps up Agile.
Oracle Corp. announced deal to buy Agile software corp. for $495 million (Rs. 2,030 crore)
Page 20
Arcelor Mittal's first quarter net jumps 40% on rising steel prices.
Mint 18 May 2007
Page 1
Bajaj Auto split into three entities. Bajaj Auto, Bajaj Holdings and Investment Ltd.(BHIL), and Bajaj Finserv Ltd.(BFL)
page 3
Tata Steel nets record Q4 profit on higher prices. Net profit rose ot Rs 1,103 crore from rs 783 crore a year earlier.
*It is good to follow Tata Steel and Arcelor Mittal as they have done huge acquisitions last year.
page 6
Chrysler sale just what the doctor ordered: Dr Zetsche, CEoof DaimlerChrysler AG.
Page 1
HDFC buys Chubb out of JV HDFC Chubb General Insurance Co.
Page 18
Thompson, Reuters agree on terms of merger
Page 19
After pact to get rid of Chrysler, Daimler turns to other challenges
Mint 17 May 2007
Page 1
Mallya pays $1.18 bn(Pound595 million or Rs 4,797 crore) for Whyte & Mackay. The deal is the fourth-biggest overseas deal announced by an Indian company this year. (What are the other three - Tata-Corus, Hindalco-Novelis, Third one?).
Page 7
Will Chrysler's next suitor be from India? Commentary by David Lazarus
Page 11
Oracle snaps up Agile.
Oracle Corp. announced deal to buy Agile software corp. for $495 million (Rs. 2,030 crore)
Page 20
Arcelor Mittal's first quarter net jumps 40% on rising steel prices.
Mint 18 May 2007
Page 1
Bajaj Auto split into three entities. Bajaj Auto, Bajaj Holdings and Investment Ltd.(BHIL), and Bajaj Finserv Ltd.(BFL)
page 3
Tata Steel nets record Q4 profit on higher prices. Net profit rose ot Rs 1,103 crore from rs 783 crore a year earlier.
*It is good to follow Tata Steel and Arcelor Mittal as they have done huge acquisitions last year.
page 6
Chrysler sale just what the doctor ordered: Dr Zetsche, CEoof DaimlerChrysler AG.
Wednesday, May 16, 2007
DaimlerChrysler Timeline
April 12, 1995: Kirk Kerkorian's Tracinda Corp. makes offer for Chrysler Corp. valuing company at $22.8 billion.
Feb. 7, 1996: Chrysler makes peace deal with shareholder Kerkorian in return for stock buybacks and board seat.
Feb. 12, 1998: Daimler-Benz AG and Chrysler Corp. begin secret takeover discussions.
May 7, 1998: Daimler-Benz's Juergen Schrempp and Chrysler Corp.'s Robert Eaton announce $36 billion takeover that creates DaimlerChrysler AG.
Nov. 17, 1998: DaimlerChrysler AG U.S. shares begin trading at $84.31 per share.
Jan. 6, 1999: DaimlerChrysler stock hits $108 per share.
Oct. 26, 2000 Chrysler posts $512 million loss for third quarter.
Oct. 30: Schrempp quoted as saying by the Financial Times he never intended a merger of equals but that it was portrayed that way "for psychological reasons."
Nov. 17: Schrempp puts Mercedes-Benz veteran Dieter Zetsche in charge of Chrysler.
Nov. 27: Kerkorian sues company and Schrempp for $9 billion, accusing them of fraud.
Jan. 29, 2001: DaimlerChrysler announces it will cut 26,000 jobs, or about one-fifth of the work force at Chrysler and idle six plants over the next several years.
March 2001: Stock falls from more than $50 per share to roughly $38 as DaimlerChrysler grapples with weak North American and European economies.
April 2005: Cash cow Mercedes Car Group posts its first quarterly loss in more than 10 years.
April 7, 2005: Kerkorian loses his fraud suit against company.
July 28, 2005: Schrempp announces he is stepping down, with Chrysler head Zetsche to replace him on Jan. 1, 2006.
Sept. 1, 2005: Zetsche also takes over as head of Mercedes Car Group.
September 2005: Mercedes Car Group announces elimination of 8,500 jobs.
January 24, 2006: Company says it will cut 6,000 white-collar jobs worldwide -- 20 percent of DaimlerChrysler's administrative work force.
Sept. 7, 2006: United Auto Workers union refuses to grant health care concessions to Chrysler Group, even though GM and Ford got them.
Feb. 14, 2007: DaimlerChrysler says it won't rule out "any option" including sale of Chrysler. Chrysler says it will cut 13,000 more workers. DaimlerChrysler shares rise 5 percent, to more than $67.
April 4, 2007: Zetsche says company is in talks about future of Chrysler but does not say if it will be sold.
April 5, 2007: Kerkorian's Tracinda Corp. makes a $4.5 billion cash offer for Chrysler.
May 14, 2007: DaimlerChrysler announces end of nine-year takeover effort as it agrees to sell 80 percent of Chrysler to private equity firm Cerberus for $7.4 billion (5.5 billion euros).
Feb. 7, 1996: Chrysler makes peace deal with shareholder Kerkorian in return for stock buybacks and board seat.
Feb. 12, 1998: Daimler-Benz AG and Chrysler Corp. begin secret takeover discussions.
May 7, 1998: Daimler-Benz's Juergen Schrempp and Chrysler Corp.'s Robert Eaton announce $36 billion takeover that creates DaimlerChrysler AG.
Nov. 17, 1998: DaimlerChrysler AG U.S. shares begin trading at $84.31 per share.
Jan. 6, 1999: DaimlerChrysler stock hits $108 per share.
Oct. 26, 2000 Chrysler posts $512 million loss for third quarter.
Oct. 30: Schrempp quoted as saying by the Financial Times he never intended a merger of equals but that it was portrayed that way "for psychological reasons."
Nov. 17: Schrempp puts Mercedes-Benz veteran Dieter Zetsche in charge of Chrysler.
Nov. 27: Kerkorian sues company and Schrempp for $9 billion, accusing them of fraud.
Jan. 29, 2001: DaimlerChrysler announces it will cut 26,000 jobs, or about one-fifth of the work force at Chrysler and idle six plants over the next several years.
March 2001: Stock falls from more than $50 per share to roughly $38 as DaimlerChrysler grapples with weak North American and European economies.
April 2005: Cash cow Mercedes Car Group posts its first quarterly loss in more than 10 years.
April 7, 2005: Kerkorian loses his fraud suit against company.
July 28, 2005: Schrempp announces he is stepping down, with Chrysler head Zetsche to replace him on Jan. 1, 2006.
Sept. 1, 2005: Zetsche also takes over as head of Mercedes Car Group.
September 2005: Mercedes Car Group announces elimination of 8,500 jobs.
January 24, 2006: Company says it will cut 6,000 white-collar jobs worldwide -- 20 percent of DaimlerChrysler's administrative work force.
Sept. 7, 2006: United Auto Workers union refuses to grant health care concessions to Chrysler Group, even though GM and Ford got them.
Feb. 14, 2007: DaimlerChrysler says it won't rule out "any option" including sale of Chrysler. Chrysler says it will cut 13,000 more workers. DaimlerChrysler shares rise 5 percent, to more than $67.
April 4, 2007: Zetsche says company is in talks about future of Chrysler but does not say if it will be sold.
April 5, 2007: Kerkorian's Tracinda Corp. makes a $4.5 billion cash offer for Chrysler.
May 14, 2007: DaimlerChrysler announces end of nine-year takeover effort as it agrees to sell 80 percent of Chrysler to private equity firm Cerberus for $7.4 billion (5.5 billion euros).
Tuesday, May 15, 2007
News to be Noted-NTN-DaimlerChrysler sells stake in Chrysler
Source Mint, 15th May 2007, page 18 and
http://www.livemint.com/2007/05/14145047/Daimler-hands-Chrysler-to-Cerb.html
DaimlerChrysler AG ended a nine-year investment in money-losing Chrysler, handing control of the carmaker to private-equity firm Cerberus Capital Management LP and getting out from under $19 billion of retirement benefits.
Cerberus will put up $7.4 billion with most of the money invested in Chrysler, while DaimlerChrysler will pay out a net amount of $650 million, the Stuttgart, Germany-based company said on 14 May in a statement. The agreement gives Cerberus 80.1% of Chrysler, while the Germans, who paid $36 billion for the automaker in 1998, will retain 19.9%.
Chrysler lost $680 million last year and ceded market share to Toyota Motor Corp. while relying too much on the stagnant North American market. DaimlerChrysler Chief Executive Officer Dieter Zetsche failed to keep the US carmaker profitable after completing a reorganization he began as head of the business.
Shares of DaimlerChrysler rose as much as 4.73 euros, or 7.8%, the biggest gain since former CEO Juergen Schrempp announced his departure in July 2005, to 65.34 euros and were up 6.5% at 10:47 a.m. in Frankfurt. The stock has surged 31% since 13 February, the day before Zetsche said “all options” were on the table for Chrysler’s future.
KVSSNRao
http://www.livemint.com/2007/05/14145047/Daimler-hands-Chrysler-to-Cerb.html
DaimlerChrysler AG ended a nine-year investment in money-losing Chrysler, handing control of the carmaker to private-equity firm Cerberus Capital Management LP and getting out from under $19 billion of retirement benefits.
Cerberus will put up $7.4 billion with most of the money invested in Chrysler, while DaimlerChrysler will pay out a net amount of $650 million, the Stuttgart, Germany-based company said on 14 May in a statement. The agreement gives Cerberus 80.1% of Chrysler, while the Germans, who paid $36 billion for the automaker in 1998, will retain 19.9%.
Chrysler lost $680 million last year and ceded market share to Toyota Motor Corp. while relying too much on the stagnant North American market. DaimlerChrysler Chief Executive Officer Dieter Zetsche failed to keep the US carmaker profitable after completing a reorganization he began as head of the business.
Shares of DaimlerChrysler rose as much as 4.73 euros, or 7.8%, the biggest gain since former CEO Juergen Schrempp announced his departure in July 2005, to 65.34 euros and were up 6.5% at 10:47 a.m. in Frankfurt. The stock has surged 31% since 13 February, the day before Zetsche said “all options” were on the table for Chrysler’s future.
KVSSNRao
Monday, May 14, 2007
Current Teaching Responsibility and Study
Sunday, April 29, 2007
Current Teaching Responsibility and Study
I have to teach the subject Mergers and Acquisition from the last week of June 2007. I am going to use the book, Takeovers, Restructuring, and Corporate
Governance, fourth edition by Fred Weston, Mark Mitchell, and Harold Mulherin as the text book. There are 22 chapters in this book. As a part of my preparation, I plan to read 22 books one on each chapter to acquire the required depth in subject. I also plan to read five other books on mergers and acquisitions to pick up various ways of explaining the same topics.
The five books being used for broadening the knowledge are:
1. Wyatt & Kieso, Business Combinations: Planning and Action, International Text Book company, 1969
2. Weston & Samuel C. Weaver, Mergers and Acquisitions, Tata Mcgraw Hill, 2001
3. James W. Bradley and Donald H. Korn, Acquisition and Corporate Development, Lexington Books, D.C. Heath & Co., Lexington, 1981 ( a book by Arthur D. Little Executives)
4. P.S. Sudarsanam, The Essence of Mergers and Acquisitions, Prentice Hall of India Private Limited, New Delhi, 1997
5. Fred Weston et al., Takeovers, Restructuring, and Corporate governance, second edition
The books being used for deepening the knowledge include: 1. Book on Income tax of India, 2. Company Act of India, 3. Advanced Accounting text, 4. Valuation by Copeland, 5. Book on Joint Ventures by Yoz and Hamel, 6. M&A:
A Practical Guide to Doing the Deal by Jeffrey Hooke, 8. Strategic Management:Concepts and Cases by Thompson and Strickland 13th edition, and 9. Mergers et al, Issues, Implications, and Case Laws in Corporate Restructuring by S. Ramanujam.
I am now involved in a study marathon.
posted by KVSSNrao at 8:41 PM
Posted from www.kvssnrao.blogspot.com
Current Teaching Responsibility and Study
I have to teach the subject Mergers and Acquisition from the last week of June 2007. I am going to use the book, Takeovers, Restructuring, and Corporate
Governance, fourth edition by Fred Weston, Mark Mitchell, and Harold Mulherin as the text book. There are 22 chapters in this book. As a part of my preparation, I plan to read 22 books one on each chapter to acquire the required depth in subject. I also plan to read five other books on mergers and acquisitions to pick up various ways of explaining the same topics.
The five books being used for broadening the knowledge are:
1. Wyatt & Kieso, Business Combinations: Planning and Action, International Text Book company, 1969
2. Weston & Samuel C. Weaver, Mergers and Acquisitions, Tata Mcgraw Hill, 2001
3. James W. Bradley and Donald H. Korn, Acquisition and Corporate Development, Lexington Books, D.C. Heath & Co., Lexington, 1981 ( a book by Arthur D. Little Executives)
4. P.S. Sudarsanam, The Essence of Mergers and Acquisitions, Prentice Hall of India Private Limited, New Delhi, 1997
5. Fred Weston et al., Takeovers, Restructuring, and Corporate governance, second edition
The books being used for deepening the knowledge include: 1. Book on Income tax of India, 2. Company Act of India, 3. Advanced Accounting text, 4. Valuation by Copeland, 5. Book on Joint Ventures by Yoz and Hamel, 6. M&A:
A Practical Guide to Doing the Deal by Jeffrey Hooke, 8. Strategic Management:Concepts and Cases by Thompson and Strickland 13th edition, and 9. Mergers et al, Issues, Implications, and Case Laws in Corporate Restructuring by S. Ramanujam.
I am now involved in a study marathon.
posted by KVSSNrao at 8:41 PM
Posted from www.kvssnrao.blogspot.com
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