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ASSESSMENT OF MERGER

AND ACQUISITION OF ANY


TWO
GLOBAL FIRM
ByNisha
Shashi
Ankita
Pankaj
Sonia

MERGER & ACQUISITION


A merger is a legal consolidation of two companies into one entity
Merger is done by offering the stockholders of one company securities in the acquiring
company in exchange for the surrender of their stock.
An acquisition occurs when one company takes over another and completely
establishes itself as the new owner.
Target company still exists as an independent legal entity controlled by the acquirer.
Acquisitions are often made as part of a company's growth strategy whereby it is more
beneficial to take over an existing firm's operations and niche compared to expanding on
its own.
Often paid in cash, the acquiring company's stock or a combination of both

DIFFERENCE BETWEEN MERGER AND


ACQUISITION
Merger

Acquisition

Two companies (often of same size) One company takes over another
decide to move forward as a single and establishes itself as the new
new company
owner of the business
Stocks of both the companies are Buyer company swallows the
surrendered, while new stocks are business of the target company
issued afresh
Example, Glaxo Wellcome and Example, Dr. Reddy's Labs acquired
SmithKline Beehcam ceased to Betapharm through an agreement
exist and merged to become a new amounting $597 million
company,
known
as
Glaxo
SmithKline

TYPES OF MERGER

Horizontal Merger
2 Vertical Merger
3. Conglomerate Merger
4. Concentric Merger
1

FACEBOOK AND WHATSAPP


ACQUISITION

Mark Zuckerberg
CEO of Facebook

Jan Koum
CEO of WhatsApp

WHATSAPP
Founded

Feb 24 2009

Founder

Jan Koum

Stable Release

iOS Version 2.11.7


Windows 2.11.356.0
Blackberry 2.11.529
Android 2.11.152

Operating System

iOS, Android, Blackberry, Nokia


Series 40, Symbian, Windows,
Nokia Asha

FACEBOOK
Founded

Feb 4 2004

Founder

Mark Zuckerberg, Eduardo


Saverin, Andrew McCollum,
Dustin Moskovitz, Chris Hughes

Revenue

US$7.872 billion

Operating income

US$2.804 billion

Net income

US$1.5 billion

Users

1.23 billion (monthly active)

Value of the Deal


WhatsApp is being Acquired for $19 billion
It includes
- USD 4 billion in cash

- USD 12 billion worth of Facebook shares


- USD 3 billion in restricted stock units

Jan Koum to join board of directors of facebook

Why Acquisition
MAU (monthly active users) will ramp up to 1 billion by 2019

Gives it additional leverage over Twitter in the battle for more


direct messaging market share.
WhatsApps function will make it a near-essential add-on to
smartphones, and thiscombined with smartphone user growth
as well as user behaviour thats shifting more and more towards
mobie.

This will help Facebook to diversify its revenue sources away


from the U.S.

SWOT Analysis
Strengths
Loyal customers
Market share leadership
Group Chat
Available for all platforms
Diversify
Free voice calls and Voice Massages
Weakness
Not diversified, because other applications offers the same
service and also function as social media
To access the account can only be paid by credit card only
Only works with a data plan or Wi-Fi

Opportunities
Continued development of technology platforms
Advanced technology
Recognized application
Modernization of people
Increased demand for smartphones
Threats
Competitors like WeChat, Viber, Tango, Skype, Line
Product substitution
Similar applications and free

Present Status
WhatsApp to add voice call to its product in second half of
this year or next year.
Two privacy groups filed a complaint with the Federal
Trade Commission to block Facebook's $19 billion
acquisition of messaging service WhatsApp. The groups
want Facebook to provide more insight into how it intends
to use data from the app's 450 million users.

Sun Pharmaceutical
acquires
Ranbaxy

Sun Pharmaceutical
Incorporated

Founded

in 1983, went public in 1994

by Dilip Sanghvi

Biggest

Indian drug maker by valuation

Market

presence in 45 countries

Turnover

14th

of Rs 16,004 Crore (March ending 2013)

acquistion of Sun since 1997

Ranbaxy
Multinational

Pharma Company

Incorporated

in 1961, went public in 1973

Wide

range of generic medicines

2008:

Daiichi Sankyo acquired 34.8% stake

Exports

to 43 counties, Manufacturing facilities in 8

Turnover

of Rs 12,410.43 Crores (March ending 2013)

Highlights of Deal
Deal

announced on 7th April 2014

Valued

at approximately $ 4 Billion

Ranbaxy

share holders to get 4 shares of Sun for


every 5 shares of Ranbaxy
Daiichi

Sankyo to become second largest


stakeholder in Sun
$250

Million revenues and operational synergy

Sun Pharma+ Ranbaxy


Profile of the new market leader
Sun-Ranbaxy

India's largest Pharma company

5th

largest global specialty Pharma company

No.

1 Indian Pharma company in US

Increased

presence in emerging markets like Russia, Romania, SA,

Brazil
Merged

entity to have footprints across 55 markets

Benefits
India

Broad and complementary branded presence


Combined entity: 31 brands in top 300
Minimal overlap of brands
Enhances rural reach

Extensive

market product basket

Opportunities

to leverage market presence to cross

sell
Strong

Doctor relationships

Challenges in front of Sun


Pharma
Justifying
Dealing

valuation as it fixes Ranbaxy

with USFDA issue of Ranbaxy

Unforeseen
People

legal liabilities

related issues

Current status of the deal


BSE/NSE

approval-Done 21 July, 2014

Competition

Commission of India (CCI)- On Hold

Approval of

various Indian courts- To be done

Shareholder

and creditors clearance- Cake walk

THANK YOU

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