Globally the era of volatility has made it inevitable for a business to grow only through organic means. Merger and acquisition (M&A) become the ultimate trail followed by organizations to achieve exponential and not just linear growth.
The Indian M&A landscape is no different. Consulting Companies strongly recommend M&As becoming an integral part of the Indian economy. Based on macroeconomic indicators, India is on a growth trajectory with the M&A trend likely to continue. Inorganic growth undoubtedly tops the catalysts for M&A, backed by several government efforts pressing for ease of doing business in India. M&As also reduce dependence and hence either backward or forward integration by way of investing in another function of the supply chain becomes a viable option.
India has witnessed certain historic changes in the legal and regulatory scenario since 2014. Campaigns backed by the government such as ‘Make in India’ and ‘Digital India’ has virtually changed the economic landscape in the country ushering in an era of increased investments and consolidations. The confidence of the investor received tremendous boost with the implementation of GST – Surely a lively space for M&As in the recent years!
Some of the leading mergers and acquisitions consulting firms in india, have been successfully assisting numerous clients in structuring and executing complex transactions over past three decades. Our customers vouch for our expertise on growth strategies. Acquisitions can dramatically shift their organization’s position by offering enhanced competitive position, augmented relationships with service providers, improved financial and credit position, while increasing their operational efficiencies remarkably.
Deal making reached new highs in 2018. India India Management Consultant, PWC recently announced the value M&A deals involving Indian companies reaching US$125.2 billion so far, a 98.1% increase in value, surpassing the annual record set in 2007 (US$67.4 billion). Number of announced deals grew 9.3% from a year ago and witnessed the busiest annual period since records began in 1980.
Tecnova strongly believes in a four-point implementation program while undertaking M&A for our clients:
1) Deal Preparation:
We commence the acquisition evaluation process by identifying growth opportunities in business or service lines or any markets served.
2) Structuring Deal Negotiations
We guide you with the structuring and strategy of the deal, valuations and negotiations while drafting the Terms and Conditions along with the likely benefits of a transaction.
3) Due Diligence and Closing:
This is a critical part after the offer is accepted. Tecnova guides leaders of the acquiring organization to ensure a complete and comprehensive due diligence review of the target entity.
4) Post Acquisition Integration:
Any successful merger or acquisition involves combining two organizations in an expedient manner to maximize strategic value while minimizing distraction to existing operations.
The growing trend is only expected to extend into 2019. In addition, as Internet penetration escalates, especially in rural areas, consumer goods will experience an unprecedented level of deal activity as companies merge with each other to gain the upper hand.
Let us observe some of the top M&A deals in India over the past decade:
- Vodafone forayed into the Indian telecom market in 2007 after it purchased controlling stake in Hutchison Essar. Vodafone acquired 52 percent stake in the Indian telecom company for USD 10.9 billion, which was the biggest deal in the sector
- After months of speculations, in May 2014, Flipkart acquired its fashion-focused rival Myntra, to curtail Amazon's expanding presence in India. As per reports the deal was placed between USD 300 million and USD 330 million
- April 2015 witnessed Ola acquiring the smaller but value-centric TaxiForSure for USD 200 million in a cash and equity deal. The deal saw Ola expand its presence considerably in the country by adding TaxiForSure's 15,000-plus fleet across 47 cities onto its own platform
- Vodafone India and Idea Cellular merged operations in the country to create an entity that will be equally owned by UK’s Vodafone Group and India’s diversified Aditya Birla Group. The value of this deal in 2018 stood at USD 23 million
- Aug 2018 also saw the Walmart Inc. and Flipkart Group announcing the closing of $16 billion deal that made Walmart the largest shareholder in Flipkart
Website: www.tecnovaglobal.com
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