Assocham Conference - New Delhi, India : Value creation through M&A :cross border acquisitions / Mazars Presentation at Assocham conference 25-03-2015 (Nicolas Ribollet)

1. VALUE CREATION THROUGH M&A :
CROSS BORDER ACQUISITIONS
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ASSOCHAM - 3rd National Conference on “Value Creation through Mergers & Acquisitions”
Hotel Shangri-La, New Delhi, 25 March 2015

2. TRENDS OF OUTBOUND M&A FROM INDIA
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3. OUTBOUND M&A
fast becoming
a significant
source of
cross border
investment
India expanding abroad
direct access
to newer and
more
extensive
markets and
better
technologies
Global Reach
33

4. INDIA OUTBOUND M&A TREND - SECTORS
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Manufacturing, Financial/Insurance/Business Services and
Mining/Agriculture have been Dominant industries in India’s
outbound M&A activities in recent years.
* Includes Investments in Real Estate until December 2012
Source: RBI database on Overseas Investments
Breakdown of India’s cross-border
M&A activity by industry group (in
USD millions) 2011-2014

5. Manufacturing
27%
Financial,
Insurance &
Business
Services*
23%
Agriculture &
Mining
21%
Transport,
Storage &
Communication
Services
11%
Other sectors
18%
INDIA OUTBOUND M&A TREND - SECTORS
55
Manufacturing, Financial/Insurance/Business Services and Mining/Agriculture
have been Dominant industries in India’s outbound M&A activities in recent
years.
* Includes Investments in Real Estate until December 2012
Source: RBI database on Overseas Investments
Breakdown of India’s cross-border
M&A activity by industry group (in
USD millions) Total 2011-2014

6. DRIVERS BEHIND CROSS BORDER DEALS
02

7. FACTORS DRIVING CROSS BORDER M&A
77

8. FACTORS DRIVING CROSS BORDER M&A
88

9. FACTORS DRIVING CROSS BORDER M&A
99

10. FACTORS DRIVING CROSS BORDER M&A
1010

11. FACTORS DRIVING CROSS BORDER M&A
1111

12. FACTORS DRIVING CROSS BORDER M&A
1212

13. FACTORS DRIVING CROSS BORDER M&A
1313

14. THE INDIAN ENVIRONMENT FACTORS FOR
CROSS BORDER ACQUISITIONS
03

15. FACTORS DRIVING CROSS BORDER M&A
• Access to
financing and
capital
• policy and
regulatory
obstacles
• stable political
environment
• The new Act
removed some
barriers to
international
mergers
• norms for foreign
investment by
Indian corporates
Liberal RBI
Regulatory
Policy
Amendment
in
Companies
Act, 2013.
Access to
Financing
and capital
Stable
political
environment
1515

16. CHARACTERISTICS OF INDIAN
ACQUISITIONS OVERSEAS
04

17. CHARACTERISTICS OF INDIAN ACQUISITIONS OVERSEAS
Strategic
Acquisitions
Deal Size
Targeting
developed
economies
Seizing
Opportunities
17

18. WAY FORWARD FOR OUTBOUND
CROSS BORDER M&A
05

19. PROSPECT OF INDIA’S OUT-BOUND CROSS BORDER M&A
AND KEY FACTORS OF SUCCESS
Organisational
structure /
Strategic
approach to
location
decisions
Comprehensive
due diligence
Leadership’s
commitment
and
communication
Post-deal
integration
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20. FLEXIBLE ORGANISATION AND COMPREHENSIVE DUE
DILIGENCE ARE CRITICAL FACTORS FOR SUCCESSFUL
CROSS BORDER DEALS
Experience in
the industry
Expertise in
different areas
Site visit Negotiation skills
in international
context
Time
Familiar with
the strategic
and financial
rationale
behind the
acquisition
Team with
international
experience
and training
Clear rules of
engagement
Tools adapted
to the
international
environment
Healthy flow
of information
MAKE SURE THAT THERE IS AN EFFECTIVE FLEXIBLE STRUCTURE AND A
STRONG DUE DILIGENCE TEAM IN PLACE TO PERFORM CROSS BORDER M&A

21. STRATEGIC APPROACH FOR LOCATION DECISIONS FOR
CROSS BORDER DEALS
Coping with country risks
Pre-integration planning
Dealing with political sensitivities or
historical tensions
Learning from previous deals
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22. COMMUNICATION IS EVEN MORE CRITICAL THAN FOR
DOMESTIC DEALS
Externally
with
customers,
suppliers and
partners
Internally with
employees
Externally
with
regulators,
shareholders,
and
competitors
With other
stakeholders
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23. UNDERSTANDING OF DIFFERENCES AND LOCAL
ENVIRONMENT IS CRITICAL
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24. POST DEAL INTEGRATION IS CRITICAL
Integration
Post deal
Operations
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25. Mazars is present in 5 continents.
www.mazars.co.in
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Our offices:
Bengaluru
No 102, Gangadhara Chetty Road
Near Ulsoor Lake
Bangaluru 560042
Tel: +91 80 2554 9666
Delhi/NCR
Plot No. 421, IInd Floor
Udyog Vihar , Phase IV
Gurgaon 122016
Tel: +91 124 481 4444
Mumbai
Army & Navy Building
148 – MG Road
Mumbai 400001
Tel: +91 22 6158 7200
Pune
III Floor, Pro 1 Business Centre
Plot no 34+35, Senapati Bapat Road
Pune 411016
Tel: +91 20 2565 3365
CONTACT:
Mazars
Nicolas Ribollet
Email : nicolas.ribollet@mazars.in