Prasanna Devadiga- KH08JUNMBA87 Amol Patkar - KH08JUNMBA60 Sanghmitra Kamble- KH08JUNMBA94 Mergers and Acquisitions

Mergers A merger is a combination of two companies in to one larger company, which involves stock swap or cash payments to the target.

Why mergers ? Gain market share Economies of scale Enter new market Acquire technology Utilization of surplus funds Managerial effectiveness Strategic Objective Vertical Integration

Merger: Nokia & Siemens A new 50-50 joint venture company is formed. This new company will instantly become the third largest communications equipment provider in the world with annual revenues of over 15 billion Euros or US $ 30 billion The new entity is 50-50 joint venture called nokia Siemens networks & will encompass both fixed line and mobile networking products as well as managed services offered to carriers.

Merger: Nokia & Siemens Nokia Siemens network would have annual sales of close to 16 billion Euros (20 Billion $) and a workforce of 60.000 making it number 3 in the sector behind Ericsson & Alcatel/Lucent. Nokia & Siemens aim to save cash through the marriage predicting cost reduction of 1.5 billion per year by 2010

Merger: Nokia & Siemens The integration of two businesses would also lead to job cuts mainly in Germany, with 10-15 percent of the combined 60,000-strong workforce-or 9000 jobs in all – to be axed over the next four years.

Acquisitions When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exits, the buyer “swallows” the business and the buyer’s stock continues to be traded.

Acquisitions Structure Asset Purchase Business purchase Share purchase. Apportionment of Risk No hidden matters

Acquisitions-TATA-CORUS Tata acquired Corus which is four times larger than its size and the largest steel producer in UK. The deal which created the worlds 5th largest steel makers, is India's largest ever takeover and follows Mittal steels $31 Billion acquisition of rival Arcelor in the same year. Tata acquired Corus on the second of April 2007 for the price of $12 billion. The price per share was 608 pence, which is 33.6 percent higher than the first offer which was 455 pence.

Process of Acquisition Finding a target business Appointing Advisers Negotiating Terms Due Diligence Exchange of Contracts Completion

Finding a target business Synergy Of Operations Help the organizations to achieve strategic objective. Enter New Markets.

Appointing Advisers The right chemistry The right experience Advisers for Corus were: J p Morgan/Cazenove/HSBC Advisers for TATA were: ABN Amro/Deutsche Bank/Standard Chartered

Negotiating Terms Commonality of client base Financial Strength. Strategic Intent Sharing of resources Applicable Benefits.

Negotiation By Tata September 20,2006: Corus steel has decided to acquire a strategic partnership with a company that is a low cost producer. October 5,.2006: the Indian steel Giant, Tata steel wants to fulfill its ambitions to expand its business further. October 6,2006: The initial offer from Tata steel was considered to be too low by both Corus and its analysts. October 17,2006: Tata steel kept its offer to 455 p Share October 18,2006: Tata steel still doesn’t react to Corus and its bid remains the same. October 20,2006: Corus accept the terms of 4.3 billion takeover bid from Tata steel. October 23,2006:The Brazilian steel group CSN recruits a leading investment bank to offer advise of possible Counter-offer to Tata steel’s bid.

Negotiation By Tata October 27,2006: Corus is criticized by the chairman of JCB Sir. Anthony Bamford for its decision to accept an offer from TATA November 3 ,2006: The Russian steel giant Severstal announces officially that it will not make a bid for Corus. November 18 2006:The battle over Corus intensifies when Brazilian group CSN approached board with a bid of 475 p share. December 18 2006:Within hours Tata steel increasing its bid to 500 pence p share, Brazils CSN made its formal bid for Corus at 515 pence p share in cash, 3 % more than TATA steel. January 31 2007:Britains takeover panel announces in an e-mailed statement after an auction TATA steel had agreed to offer Corus investors 608 pence per share. April 2 2007: TATA steel manages to win the acquisition to CSN and has the full voting support from Corus shareholders.

Taxation & accountancy consideration Sale of shares or assets. Due diligence Tricky areas Accounting issues. Accounting policies. Fair value accounting Earning per share & other matters.

Legal Documentation Share sale agreement The share being sold The price The restrictive agreement Conditions to the deal. Transferring tangible assets. Transferring intangible assets. Transferring liabilities. Transferring employees.

Legal Documentation The Tax deed. The disclosure letter.

Financing the deal. TATA-CORUS Deal- $ 12 Billion. Equity contribution from TATA steel: $3.88 billion Credit Suisse leaded joined by ABN AMRO & DEUTSCHE Bank in the consortium. Of the $ 8.12 Billion financing Credit Suisse provided 45 % and both the bank 27.5 percent each.

Conclusion With Corus in its fold TATA can confidently target of being in top 3 globally by 2015. We can conclude that if acquisition is well planned, executed and necessary precautions taken for the deal a company ca achieve its strategic objectives and ensure its growth through acquisition.

THANK YOU THANK YOU