Cases

Hindalco Novelis Merger

One of the biggest mergers in the aluminium industry took place between Hindalco and Novelis. This deal made Hindalco one of the leading players in the global aluminium industry. The deal inclusive of all debts was valued approximately at 6 billion US dollars. The benefits to Hindalco from this deal were increase in its global presence and access to the most advanced technology in the industry. The important aspects of the agreement that was signed on 10th feb,2007 between Hindalco and Novelis are The deal was values at approximately 6 billion US dollars. This amount was inclusive of all debt. Each share of Novelis was valued at 44.93 US dollars. This deal made Hindalco a very strong player in the global aluminium market. The milestones reached by Hindalco through this deal were

Hindalco became the largest aluminium rolling company in the world.

The deal made Hindalco one of Asia's largest producers of primary aluminium.

It also made Hindalco India's largest copper producer.

STRATEGIC RATIONALE FOR ACQUISITION

This acquisition was a very good strategic move from Hindalco. Hindalco will be able to ship primary aluminium from India and make value-added products.'' The combination of Hindalco and Novelis establishes an integrated producer with low-cost alumina and aluminium facilities combined with high-end rolling capabilities and a global footprint. Hindalcos rationale for the acquisition is increasing scale of operation, entry into high end downstream market and enhancing global presence.

Novelis is the global leader (in terms of volume) in rolled products with annual production capacity of 2.8 million tonnes and a market share of 19 per cent. It has presence in 11 countries and provides sheets and foils to automotive and transportation, beverage and food packaging, construction and industrial, and printing markets. Hindalcos rationale for the acquisition is increasing scale of operation, entry into highend downstream market and enhancing global presence. Acquiring Novelis will provide Aditya Birla Group's Hindalco with access to customers such as General Motors Corp. and Coca-Cola Co. Indian companies, fueled by accelerating domestic growth, are seeking acquisitions overseas to add production capacity and find markets for their products ``This acquisition gives Hindalco access to higher-end products but also to superior technology,''

Case2
TATA JLR Acquisition
In the past few years, the Tata group has led the growing appetite among Indian companies to acquire businesses overseas in Europe, the United States, Australia and Africa - some even several times larger - in a bid to consolidate operations and emerge as the new age Tata Motors is Indias largest automobile company, with

multinationals. revenues of $7.2 billion in 2006-07. With over 4 million Tata vehicles plying in India, it is the leader in commercial vehicles and the second largest in passenger vehicles.

Swot analysis
Strength Tata strong management capability and strong monetary base to invest Acquisition will help TATA in competing with other brands. Improving risk profile of TATA diversification in different market. Weakness Inexperience in handling luxury automobile brand. Difficult to manage the work culture.

Opportunity Rising demand for luxury automobiles in growing market like India and china. Jaguar is good in technology, Engine, IT, Accounting. Complete product line with addition of luxury brand. Access into European and American market. Threat Strong presence of competitors like Mercedes, BMW, lexus etc. Volatility in the market.

CASE 3
RIL and RPL The RIL and RPL merger would result n Indias largest ever merger. The merger enhance the value for shareholder of both the companies This merger would unlock synergies from combined operations likeCrude sourcing, Product placement, Supply Chain Optimization. It provide Greater flexibility in operations planning Expansion of refined product range.

Efficient utilization of combined cash flows integrated energy companies consistently get higher valuations. RIL to enhance its competitiveness in energy value chain

Impact of Merger Proposal RIL among top 10 private sector refining companies globally It will own 2 of the worlds 3 largest, most complex modern refineries. It will be the worlds largest producer of ultra-clean fuels at a single location.

Case 4
Procter and Gamble and Gillette the case discusses the merger of Gillette with Procter and Gamble, the two leading consumer goods companies. It describes the recent trends and studies the ongoing consolidation in the consumer goods industry. The case presents the rationale behind the decision to merge and the perceived synergies that both the companies can achieve from the merger. It also discusses the possible threats to the merger including cultural differences and various other issues. Both the companies expected the merger to bring tremendous synergies. According to Lafley, "This combination of two best-inclass companies creates a stronger brand portfolio, opportunities for even more innovation, faster sales growth, and cost savings." Analysts felt that both scale and focus were important in this industry and P&G had attempted to gain both with this acquisition.

"P&G and Gillette can grow together at levels that neither could sustain on its own. The reason is that consumer products is, in the end, a scale business. The more scale a company can create, the more opportunities there are to grow margins and invest in brand innovation."

Concern issues: The merger would result in around 6,000 job cuts equivalent to 4% of the two companies' combined workforce of 140,000. Most of these reductions would come from eliminating management overlaps and consolidation of business support functions. Product overlap would make it difficult to set the prices. There is a strong overlap in toothbrushes and toothpaste. Another fear was the P&G would face the risk of not being able to concentrate on its functioning due to the demand of the integration effect. Suggestion The firm should go with divestiture. They can start their own retail outlets for their products. The more scale a company can create, the more opportunities there are to grow margins and invest in brand innovation.