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8/14/2019 Symbiont - A Newsletter on Mergers & Acquisitions - January 2010
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Mergers and acquisitions
are inevitable in any in-
dustry. They are indeed
essential for business tosee an upward growth.
Before moving ahead with
the decision of a merger
and acquisition it is very
important for the com-
pany to conduct due dili-
gence. Due Diligence is
important to make sure
that all the disclosures
regarding corporate merg-ers and acquisitions so
that there is no problem in
the business in the future.
Due Diligence is usually
handled by teams in the
midst of the business ac-
quisitions.
They are composed of
people who are special-ised and have expert
knowledge in the field of
mergers and acquisitions.
Members of the team of-
ten have expertise in the
areas of Accounting, Risk
management, Tax, Human
resources ,Legal, Environ-
ment etc .They are usually
employees of the compa-nies handling these criti-
cal mergers and acquisi-
tions, unless the expertise
they need is not available
internally. These teams get
documents from various
departments on the basis of
which they will be able to
extract the required infor-
mation. Hence with a good
due diligence team mergers
and acquisitions will go on
smoothly and within the
boundaries of the law.
Due Diligence requires 4
steps
1.Identification-In which
information is gathered and
risks are identified. Here the
risk management team will
view the activities of the
r i s k m a n a g e m e n t
department.
2. Legal All pending andprior litigation the company
is undergoing needs to
be identified and as-
sessed. Insurance needs
to be renewed .All lossesneed to be assessed be-
fore undertaking the
merger and acquisition.
3. Summarization-It in-
volves summarizing of
all the data. It is analysed
and compared to the ex-
isting coverage by insur-
ance. Recommendationsif any can be given to the
due diligence team.
4. Post Merger-It refers
to post merger proce-
dures. It involves visiting
new location, consolida-
tion of insurance pro-
grams and fixing any
administrative or legalissues that might have
arisen during the busi-
ness acquisitions.
Hence if all the above
steps are performed the
merger and acquisition
will proceed smoothly
hence leading to less
complexities.
DUE DILIGENCE AND ITS INEVITABILITY IN M&A
SYMBIONTJetstar and AirAsia form
a deadly alliance
3
Airtel picks up 70% in
Warid Telecom
4
INOX India acquires
stake in CVA (US)
5
Himadri Chemicals ontriple acquisitions Spree
6
Mahindra enters
Aerospace Industry
7
Panasonic steers acqui-
sition of SANYO
8
Cadbury Accepts Kraft
takeover
9
Marico enters Malaysia,
acquires Code 10
10
IDBI Bank in talks to
buy a private bank
11
Ranbaxy acquiresBangalore based Biovel
12
Quiz 13
Know Thy Words 13
Crossword 15
Whats Inside
By Andrea Rosario
28thJANUARY2010
8/14/2019 Symbiont - A Newsletter on Mergers & Acquisitions - January 2010
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Jetstar and AirAsia form a deadly
alliance
Jet star and Air Asia came together onJan 6th 2010 to form an alliance that isseen as one of its kind that could com-
pletely change the Asian Budget Mar-ket. The non- equity arrangement isexpected to save hundreds of millionsof dollars in costs. The deal is primar-ily entered into for the purpose of pas-senger handling and aircraft mainte-nance. Thus the alliance is aimed atreduction in costs that would result incheaper fares for both carriers.
The agreement that has been signed
between Jet star and
Air Asia stops short
of equity participa-
tion, it will also notinvolve code sharing
which is a revenue
generating arrange-
ment under which
airlines book passen-
gers directly onto
each others flights.
The agreement in-
volves the develop-
ment of cooperationin five areas, they are- joint fleet
specification for future narrow bodied
aircraft, joint procurement of engi-
neering and maintenance supplies
and services, co-operation on airport
passenger and ramp handling ser-
vices, shared aircraft parts and pooling
inventory arrangements for aircraft compo-
nents and spare parts and finally passenger
disruption arrangement.
Jetstar is a subsidiary of Australian flag
carrier Qantas and Jet star is a Malaysiabased carrier. The two are considered asthe largest low cost carriers in Asia Pacific.According to the carriers this deal will givethem a natural advantage in one of theworlds most competitive aviation markets.The agreement will reduce costs and pool
their expertise, and result inlower fares for customersthroughout the Asia Pacific.This is the first time two ma-
jor low-cost carriers are co-operating on such a largescale. The arrangement willhelp the airline maintain its
position as the lowest-costairline in the world, despiterising costs associated withthe fledgling global economicrecovery.
According to Qantas CEO
Alan Joyce, the aviation mar-
ket in Asia is a growth mar-
ket and it has proven resilient
over the past year, despite the tough operat-
ing environment. There is significant
growth in passenger numbers forecast in
this region. The partnership between the
two will ensure that both airlines can capi-
talize on these growth opportunities
DATE January 6,2010
ACQUIRER Jetstar
ACQUIREE AirAsia
DEAL VALUE Not disclosed
DEAL
NATUREMerger
PURPOSE Reduction ofcosts to pass oncheaper faresto customers
FACTFILE
AirAsiaisthefirstai
r-
lineintheregiontoim
-
plementfullyticketle
ss
travelandunassigned
seats.However,asof
5
February2009
,AirAsia
hasimplementedallo-
catedseatingacrossa
ll
AirAsiaflights,inclu
d-
ingintheirsisterair-
lines,IndonesiaAirA
sia
andThaiAirAsia.
The very best financial presentation is one that's well thought out and anticipates any
questions... answering them in advance.- Arthur
Both the airlines aim to gain cost benefit
By Anjali and Chinnu
DEAL SYNOPSIS
SYMBIONT JAN 2010
http://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.htmlhttp://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.htmlhttp://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.htmlhttp://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.html8/14/2019 Symbiont - A Newsletter on Mergers & Acquisitions - January 2010
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India's largest telecom firm, BhartiAirtel Ltd, has affirmed its ambitions toexpand beyond India by buying a 70%stake in Bangladesh's fourth largesttelecom firm, Warid Telecom Interna-tional Ltd.
Declining revenue per sub-scriber has forced BhartiAirtel to look for firms inoverseas markets with higheraverage returns. Last year, ittried to buy South Africa'sMTN Group Ltd, but failed
Warid will be Bharti's sec-ond operation outside India.The firm launched servicesin Sri Lanka last January. Ithad at least one million cus-tomers in the island nation by June.
Bharti will initially invest $300 million(Rs1, 362 crore) in Warid to expand itsoperations. The firm will gain controlof Warid's board and daily operations,while current owners, the DhabiGroup, will hold the remaining 30%stake.
With 116 million subscribers, Bharti is the10th largest telecom firm in the world.Warid has 2.9 million subscribers, which isas much as Bharti adds every month inIndia.
But Bangladesh has one of the lowest tele-com penetration rates in theworld--only 32% of its 160million population, or 51.2million, is connected to a tele-
phone. India, with a 1.1 billionpopulation, ended Novemberwith a tele-density of 46.32%,far below the global averageof 80%.
The deal underlines Bharti'sintent to expand in interna-tional markets. Last year,
Bharti called off its negotiations with MTN
for a $23 billion merger. The two firms hadextended negotiations twice, but called thedeal off reportedly due to hurdles posed bythe South African government. At the time,many analysts said Bharti had to expandglobally to maintain growth momentum.But they also said Bharti should buy li-censes in countries rather than merge withtelecom firms.
Airtel picks up 70% in Warid Telecom
DATE January 13, 2010
ACQUIRER Bharti Airtel Ltd.
ACQUIREE Warid Telecom International Ltd.
DEAL VALUE $300 million
DEAL NATURE Acquisition
PURPOSE Cost and position leveraging
InMay10th,20
07,
WaridTelecom
launched its co
m-
mercialoperatio
ns
inBangladeshw
ith
a network enco
m-
passing26 distr
icts.
ByNovember2007,
the network
had
been expanded
to
cover 61 distri
cts
andbeingusedb
y2
millioncustomers
.
My definition of financial freedom is simple: it is the ability to live the lifestyle you
desire without having to work or rely on anyone else for money.T.HARV EKER
As a part of its International reach strategy
By Kamnashish and Nirmoy
FACTFILE
After the MTN deal
fell through in Octo-
ber, Bharti has been
on the lookout for
smaller acquisitions in
the South Asia region.
The Warid deal is the
first step in that strat-egy, Manoj Kohli,
chief executive of
Bharti
SYMBIONT JAN 2010
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These two complementary core compe-tencies made the deal synergetic andwill strengthen the position of marketleadership, technical know-how and
product range for the joint entity. Boththe companies will continue to offertheir product and services. Mr. ChrisCarr, Mr. Hector Villarreal and Mr.Dean Corbin, the owners of CVA, willcontinue to play leadership roles inCVA after the acquisition.
The acquisition covers two manufactur-
ing units of CVA for cryogenic trans-
portation equipment at Mont Belvieu in
Texas as well as its operations in Can-
ada and joint ventures in China and Tur-
key. INOX has funded the transactionfrom internal accruals of its group busi-
ness with a small amount of acquisition
debt.
Indias largest cryogenic engineering
company INOX India Ltd, a part ofINOX Group of Companies, has acquiredmajority stake of more than 51 % (exactfigure undisclosed) for about $140 mil-lion in US based Cryogenic Vessel Alter-natives (CVA), the world's largest manu-facturer of cryogenic transportationequipment.
Vadodara based INOX India is a 250 Crcompany under the umbrella of INOXGroup and enjoys more than 70% marketshare in India. The revenue mostly (about60%) comes from the export businessand they have a market presence innearly 100 countries across the World.On the other hand, Texas based CVA, a
270 Cr company, specialized in largecryogenic transport tanks and mobile oiland gas field pumping units.
They have presence across Canada,China and Turkey apart from US. InCryogenic transportation equipment mar-ket CVA enjoys around 65% marketshare.
INOX India acquires majority stake inCryogenic Vessel of US
Rich people do not back away from problems, do not avoid problems, and do not com-plain about problems. Rich people are financial warriors.T. HARV EKER
To strengthen its current position around the world
By Surajit and JimmyDEAL SYNOPSIS
Mr. Chris Carr, CEO of CVA commented that,
Together we are a balanced company, strategi-cally well placed to compete at the leading edge
of a rapidly growing cryogenic industry.
DATEDecember 21, 2009
ACQUIRERINOX India
ACQUIREECryogenic Vessel Alterna-
tives (CVA), US
DEAL VALUE$140 million
DEAL NATURE-Acquisition
PURPOSETo strengthen the Global
position
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Himadri Chemicals , the producer
of coal tar pitch in India that also
makes products like creosote oil is
planning to buy three overseas
firms for around $400 million ( Rs
1848 crore ).The firm has recently
sold a stake of 15.39% to Bain
Capital India Investments for
Rs 252.4 crores with a view tomobilize capital for its foreign
acquisition strategy ,along
with this the firm plans to
raise the rest of the capital by
using borrowed funds se-
cured by assets of the target
companies, the company
wants to maintain its debt
equity ratio equal though
they plan to expand with
these deals.
The major aim of the ac-
quisitions is the expansion
that the company wants to
achieve in phases, they also
realize that the expansion
will not materialize immediately & are
currently conducting due diligence of
these firms. The firm also plans to spend
equal amount in the next four years to
scale up the production in India and builda coal tar distillation plant in Chinas
Shandong Province.
Himadri Chemicals is the biggest manu-
facturer of coal tar pitch in India. It is one
of the world's 3 players to have devel-
oped Zero QI grade coal tar pitch, which
is used in graphite industry. With a pro-
duction of 169,000 tonnes of coal tar
pitch a year, it has already capturedaround 70% of the market share & the
rest is controlled by the unorganized sec-
tor & enjoys a sort of monopoly in the
market.
Globally as well there are very few play-
ers in this business & gives Himadri an
effective advantage to acquire foreign
firms. With this strategic decision being
disclosed in the market, Himadri Chemi-
cals shares had shot up to Rs458 apiece
after the deal with Bain Capital was an-
nounced on 31 December.
Himadri chemicals to spend $400
million on acquisitionsDATE January 2,2010
ACQUIRER Himadri
Chemicals
ACQUIREE Three
overseas
firms
DEAL
VALUE$ 400
million
DEAL
NATUREAcquisi-
tion
PURPOSE Phased
global
expansion
FACTFILE
HimadriGroup ofInd
ustries
hassevenpubliclimite
dcom-
paniesunder itsbann
erwith
anetworthofmoreth
anRs.
2.20billion,with inter
ests in
chemicals,coldstorag
e, iron
andsteel andfinance
. Hi-
madriCredit&Financ
eLtd.,
withinterestsinfinancialac-
tivitieshasitssharesli
stedin
allthemajorstockexch
anges
ofIndia.
The single biggest difference between financial success and financial failure is how well you
manage your money. Its simple: to master money, you must manage money.T.HARV EKER
The major aim of the acquisitions is the expansion that the companywants to achieve in phases
By Dilip and Chippy
DEAL SYNOPSIS
SYMBIONT JAN 2010
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Mahindra is the first Indian Company to have access
to aircraft making technology, though many of its co-players are already into component manufacturing.The company would initially manufacture sheetmetal aero-structures and over a period would investmore to make components, sub-assemblies andeventually aircraft in India and Australia.
It is setting up manufacturing facility in Bangalore.Mahindra Aerospace is already in contract with
NAL to make two to five seater planes. Over fiveyears MAPL looks to build 475 aircraft in the 2-20-
seater range, expecting revenue of about Rs. 650-crore.
The company is all set to enter into the 2-20 seaterturbo prop market, which is the fastest growing seg-ments in general aviation. This market serves cus-tomers at the lowest cost per passenger seat kilome-
ter. The segment builds light civilian passenger air-
crafts, best adaptable to tough conditions in India.MAPL also has the opportunity to play in the defenceoffsets space. It also plans to service the global mar-ket.
The company is looking ahead to get into joint ven-tures with international companies like the BAE sys-tems, largest defence company in UK. The globalaerospace industry is a market for 4,000 planes.
The acquisition will give Mahindra access to orders
from Boeing Co., European Aeronautic Defence andSpace Co. and other companies bidding for defense
contracts in India. Under Indian law, foreign compa-
nies selected for defense contracts have to spend part
of the project value to source from local vendors.
Mahindra enters burgeoning
Aerospace Industry
DATE December 15, 2009
ACQUIRER Mahindra Aerospace Pvt. Ltd.
ACQUIREE Aero staff Australia Gippsland Aeronautics
DEAL VALUE $ 37.5 million
DEAL NATURE Acquisition
PURPOSE Turbo prop 2-20 seat aircrafts and allied components
The by-product is that they more people you help, the richer you become, mentally,
emotionally, spiritually, and definitely financially.
Mahindra and Mahindra along with Kotak Private Equity, acquired75.1 percent stake in two Australian aerospace firms, making its entryinto the aerospace business
By Jose and Neha
SYMBIONT JAN 2010
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Panasonic has completed its purchaseof a 50.2% majority stake in Japaneseelectronics rival Sanyo. The conclu-sion of the $4.6bn deal comes 13
months since Pana-sonic first announcedits interest in the deal.Panasonic was mostinterested in Sanyo'smanufacture of hybridcar batteries, a field inwhich both firms arestrong.
Panasonic Corporation
based in Osaka, Japan,is a global leader inthe development andmanufacture of elec-tronic products for awide range of con-sumer, business, andindustrial. The com-
pany's shares are listedin many stock ex-changes like Tokyo,Osaka, Nagoya and New York.
Despite Sanyo's success in the manu-facture of car batteries, it has faced
problems in recent years in its con-sumer products division As a result ithas cut thousands of jobs, and soldoff unprofitable operations.
Recently Sanyo - which is more reliantupon exports than Panasonic - has beenhit by the strength of the yen and risingmaterial costs. It was also forced to
change its top manage-ment after an accountingscandal over falsifying
past earnings. Sanyo'smost recent financialresults showed that itmade a net loss of30.6bn yen in the half-year to the end of Sep-tember, compared with a8.7bn yen profit a year
earlier.
The new Panasonic
Group will strive to real-
ize synergies as early as
possible by bringing to-
gether the technologies
and manufacturing ex-
pertise each cultivated
over the years and lever-
age the group synergies to the fullest
extent to hone the competitive edge in
the global market. To accomplish this
goal, Panasonic should outline new
business strategies for the new Pana-
sonic Group in its new mid-term busi-
ness plan in the next fiscal year.
Panasonic steers acquisition of
SANYO
DATE December
10th 2009
ACQUIRER Panasonic
(Japan)
ACQUIREE SANYO
DEAL
VALUE
$ 4.59
billion
DEAL
NATURE
Acquisition
PURPOSE
To become
potentially
competent
in
Electronic
Industry
SANYO strives todevelop and dis-s e m i n a t e"environmentally-conscious products"to reduce the envi-ronmental impactvia reduction of en-ergy consumption,
reduction of usageof chemical sub-stances with envi-ronmental impact,efficient usage ofrecycled materials,outstanding productdurability, and con-structing productsin a way that facili-tates recyclability.
If you want to create wealth, it is imperative that you believe that you are at the steeringwheel of life, especially your financial life. - T HARV EKER
SANYO has become a consolidated subsidiary of Panasonic and willcontinue pursuing its business as a Panasonic Group Company
By Sudhakar and Elvy
SYMBIONT JAN 2010
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Ending months of hostility, the firmannounced that it had approved a re-vised takeover bid from U.S. food gi-ant Kraft linking Cadbury's DairyMilk chocolate to Kraft's Philadelphiacream cheese in a $19.5 billion deal.This comes just months after it dis-missed an initial $16.3 billion ap-
proach from Kraft as "derisory." Butwhen Kraft sweetened the terms of adeal by raising the amount of cash itwas offering alongside its own sharesit proved too difficult for Cadbury toresist.
The British business boasts dominant
positions, strong emerging market ex-posure and the potential for massivemargin improvements. Kraft will
benefit from all of Cadbury's strengthsand at a knockdown price. Bagging thefirm for a value equivalent to 13 times,Cadbury's profit before tax and otherdeductions amounts to the cheapestfood-industry takeover in more than a
decade.
Establishing a rival to Mars as theworld's largest confectioner does notcome without challenges, though. Hav-ing borrowed heavily to buy Cadbury,Kraft will be under pressure to cut costsand raise margins at the British com-
pany. The British trade union Uniteclaimed earlier this month that some7,000 Cadbury workers would be underthreat if the proposed takeover wentthrough.
Keeping those things in mind may bemore important than in most take-
overs..It may be vital for Kraft to beviewed as respectful of Cadbury's Brit-ish valuesespecially in the U.K., theworld's second largest candy market.Overseas buyers must be aware of sen-sitivities of the brand and preserve it tosell the product successfully.
Cadbury accepts Kraft takeover
This comes just months after it dismissed an initial $16.3 billionapproach from Kraft as derisory
By Praveen and Siddharth
DATE January 19, 2010
ACQUIRER Kraft Foods Ltd.
ACQUIREE Cadbury Plc
DEAL VALUE $19.5 billion (proposed)
DEAL NATURE Proposed
PURPOSE Bank on Cadburys enduring
popularity in the UK
The very best financial presentation is one that's well thought out and anticipates any questions... answer-ing them in advance. ARTHUR
TRIVIA
The firm was
k n o w n a s" C a d b u r ySchweppes plc"from 1969 untilits demerging inMay 2008, sepa-rating its globalconf ect ionerybusiness from
its US beverageunit, which hasbeen renamedDr PepperSnap-
ple Group Inc.
SYMBIONT JAN 2010
http://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.htmlhttp://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.htmlhttp://en.wikipedia.org/wiki/Demergerhttp://en.wikipedia.org/wiki/Demergerhttp://en.wikipedia.org/wiki/Demergerhttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Dr._Pepper_Snapple_Grouphttp://en.wikipedia.org/wiki/Demergerhttp://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.htmlhttp://thinkexist.com/quotation/the_very_best_financial_presentation_is_one_that/219762.html8/14/2019 Symbiont - A Newsletter on Mergers & Acquisitions - January 2010
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IDBI Bank, an India-based commercial public sector
bank is said to have been narrowed down on the
Federal Bank, a Kerala-based private sector lender,
for acquisition. Reportedly, with 641 branches, Fed-eral Bank has a total business of around $590bn and
deposits of $334bn in South India. IDBI Bank ze-
roed in on the Federal Bank after assessing its finan-
cial strength and possibilities of integration in terms
of work culture.
The deal, if materialises, is expected to enable IDBI
to
strengthen its position among public sector banks by
increasing branch network and human resources be-
sides bolstering its deposit-base. However, IDBI
Bank, which was earlier a financial instition, willhave to take government aid for equity capital unless
the deal is an all-cash transaction. The government
owns above 52% in it.
The government will have to infuse money without
which it will be difficult for the bank to go ahead
with such a proposal under normal circumstances as
the value of this buy will be huge. The bank's credit
is picking up, with good growth in retail and
housing segment and it is confident of achieving
the 20 percent loan growth target for FY10. The
bank also does not plan to merge its home loanfinance arm with itself or offload stake in it.
IDBI Home Finance is a wholly-owned subsidi-
ary of the state-run bank and it was earlier plan-
ning to sell stake to Dewan Housing Finance
Corp Ltd.
However, the government had opposed the
move. The bank also planned to raise capital and
said it was considering a rights issue of shares or
a follow-on public offer.
The bank had earlier said it planned to raisearound 20 billion rupees through a rights issue of
shares. After the rights issue the government's
stake would be maintained at 52 percent.
But Federal Bank has not received any formal
proposal for a possible takeover. It will also help
increase Federal Banks national reach.
IDBI Bank in talks to buy a
private bank
DATE January 12, 2010
ACQUIRER IDBI Bank
ACQUIREE Undeclared (Reportedly Federal Bank)
DEAL VALUE Undisclosed Amount
DEAL NATURE Acquisition
PURPOSE Achieving the 20% loan growth target for FY10
Good growth in retail and housing segment alluring
By Surya and Abhishek
You become financially free when your passive income exceeds your expensesT. Harv Eker
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Ranbaxy Laboratories Limited an-
nounced the signing of agreements
with Biovel Lifesciences Private
Limited, Bangalore, India, provid-
ing for the acquisition of product
rights and a manufacturing facility,from Biovel.
The proposed transaction will give
Ranbaxy access to all of Biovels
products, pipeline, IP, Know-How
and manufacturing facility, located
in Bangalore, India. Ranbaxy has
created modern manufacturing in-
frastructure and a robust product
pipeline. Ranbaxy, with its globalmarket reach, quality and manufac-
turing expertise, will be able to lev-
erage this to its full potential, and
create a business of scale.
The products that are part of the
transaction include Typhoid Vi an-
tigen and Hib conjugate vaccines,
for which, Biovel has received
regulatory approval for India; aswell as Biovels development pipe-
line, comprising a range of vac-
cines, biotherapeutics and other
products. In 2008, the global vac-
cines market was approximately
USD 21 billion. It is estimated to
grow at a rate of 9%, to reach USD
34 billion by 2014. The Indian vac-
cine market valued at Rs. 3,600
Crores, in 2008, is growing annually
at 10%..
Ranbaxy Laboratories Limited, In-
dia's largest pharmaceutical company,is an integrated, research based, inter-
national pharmaceutical company
producing a wide range of quality,
affordable generic medicines, trusted
by healthcare professionals and pa-
tients across geographies.
Ranbaxy ranks second in domestic
sales among drug companies and it is
the largest in total sales. It has been
strengthening its biotech business
through a string of small scale acqui-
sitions in recent years. The company
has a majority stake in Hyderabad-
based Zenotech and an investment in
Krebs, a biotechnology company.
Ranbaxys continued focus on R&D
has resulted in several approvals in
developed markets and significant
progress in New Drug Discovery Re-search. The Companys foray into
Novel Drug Delivery Systems has led
to proprietary platform technologies,
resulting in a number of products un-
der development.
Ranbaxy acquires Bangalore based
BiovelIt enables Ranbaxy into the vaccine line
By Elizabeth and Seetha
You become financially free when your passive income exceeds your expensesT. Harv Eker
DATE
January 20, 2010
ACQUIRERRanbaxy Laboratories
ACQUIREEBiovel Lifesciences
DEAL VALUE
Undisclosed Amount
DEAL NATUREAcquisition
PURPOSEExtra platform to enter
vaccine sector
DEAL SYPNOPSIS
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By: Prathibha, Sai and Akshay
1. Canadian Mining company Glieichen Resources Inc. plans to buy the remain-ing stake of which Mexican Gold project, of which it already owns 78.8% stake?
2. One means for a company to go private is __________.
3. What is the deal size for the acquisition of Warid Telecom by Airtel?
4. The public sale of common stock in a subsidiary in which the parent usually re-tains majority control is called ______________.
5 Oracle Coorperation won European Union approval for it $7b takeover of whichcompany?
6. Forfaiting most closely resembles ____________.
7. National Australia Bank is eyeing to clinch a deal of $12 billion with which fi-nancial Cooperation?
8 Ranbaxy Laboratories Ltd has announced a deal with which Bangalore basedPharma company for acquiring latters product rights and a manufacturing
facility?
QUIZ
TESTTHEM&
AWATERS
Know Thy Words
Mergers and Acquisitions Terminologies
Macaroni Defense
Macaroni Defense is a strategy that is taken up to prevent any hostile takeovers. The issue of
bonds that can be redeemed at a higher price if the company is taken over does this.
Poison Pill or Suicide Pill Defense
This is a strategy that is taken by the target company to make itself less appealing for a hostiletakeover. The bondholders are given the right to redeem their bonds at a premium should atakeover occur.
Dawn Raid
This is a process of buying shares of the market prices may fall till the acquisition iscompleted.
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Asset Stripping
When a company acquires another and sells it in parts expecting that the funds generated
would match the costs of acquisition, it is known as asset stripping.
Bear hug
Acquirer mails letter to directors of target firm announcing intentions and requiring a quick de-
cision on bid.
Saturday night special
Offer made to stockholders just before the markets close on Friday. It takes maximum advan-
tage of stockholder greed.
Covenant Not To Compete
An agreement often signed by an employee or a selling shareholder whereby they agree not to
work for competitor companies or form a new competitor business within a specified period
after termination of employment or the closing of the acquisition. It is also called a "Non-
Competition Agreement
Amalgamation
It is blending of two or more companies. The shareholders of each company would become theshareholders of the company which is undertaking the activity. It is similar to a merger.
Crown Jewels
Sec 23 of SEBI Takeover Regulations indicates that the company calls its precious assets as
crown jewels to depict the greed of the acquirer under the takeover bid. These precious assets
attract the raider to bid for the companys control. The company sells these assets at its own
initiative leaving the rest of the company intact. (Instead of selling the assets, the company
may also lease them or mortgage them so that the attraction of free assets to the predator issuppressed.)
Reconstruction
In this, a company transfers its undertaking and its assets to a new company in consideration ofthe issue of the new companys shares to the first companys members. And if the first com-
pany members debentures are not paid off, the new company should give the debentures to therespective holders and thus the first company would lose the identity.
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Across2. Which mutual fund did Franklin Templeton Mu-
tual Fund acquire in 2002? (7)
6. Which word was derived from the French wordBougette meaning 'Little Bag'? (6)
9. Connaught Plaza Restaurants and Hardcastle Res-taurants have had the responsibility for the entryof Which MNC to India ? (9)
12. Name the term used for depreciating a company'sintangible assets (12)
13. Which is India's first Equipment Bank launchedrecently by SREI International Finance Ltd.? (5)
16. This famous Japanese corporation first started asa tiny cork manufacturer in Hiroshima in 1920,
and was known as Tokyo Cork Togyo Co Ltd.How it is known today? (5)
17. Which UK confectionary major was rumored tobid for Cadbury along with Kraft Foods? (7)
18. This Company was created to facilitate themerger of the two main state-owned airlines inIndia: Air India, with Indian Airlines (5)
19. Procter and Gamble purchased this high valuedshaving brand in 2005 (8)
Down1. Which is the only country having paper cur-
rency and have no coins and it introduced
cheque only in 1997? (7)3. Daimler-Benz took over this company in 1999
(8)4. What is the rate of interest at which short-term
funds are exchanged between banks in Londoncalled?(5)
5. Which famous corporate was founded in 1894in Zlin and made its presence in India in 1931and commenced the manufacturing of shoes atBatanagar plant in 1936? (4)
7. Big Blue is IBM. Which corporate is referred as
'Big Black' ? (3)8. This term is derived from the Greek word
'Oikanomia' means "House Management". Whatis it? (7)
10. Which multinational owns the brands Georgia(Ice Coffee), and Aquaris (Isotanic drink)? (8)
11. Where is the European Central Bank located?(9)
14. What is the exchange rate of one currency foranother over a fixed period of time called? (4)
15. What is known as the purchase of insurance
against losses because of currency fluctuations?(7)
By Puneet, Shweta and Shilpa
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Page 16
CROSSWORD ANSWERS
QUIZ
ANSWERS
1. Morelos Gold Project
2. The leveraged Buyout (LBO)
3. $ 300m
4. An Equity Carve-Out.
5. Sun Microsystem
6. Export Factoring
7. AXA
8. Biovel Lifesciences Pvt Ltd.
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Sincere acknowledgment of the efforts of all the contributors for
their knowledge filled articles, crossword and quiz .
ABOUT SYMBIONTSymbionts are organisms which come together for mutual benefit, just like companies go for Merg-ers & Acquisitions.SYMBIONT is a monthly newsletter dedicated exclusively to Mergers & Acquisitions. SYMBIONTalso has an online forum for related discussions. The newsletter has always aimed to enlighten thereaders about the current happenings in the M&A circuit along with interesting add ons like cross-
words, terminologies, brain teasers and many more.
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