S I P I N T E R I M E V A L U AT I O N

R E P O R T P R E S E N TAT I O N

Faculty Guide Name: Prof. A.K. Mitra Name: Shivika Arora

Company Guide Name: Mr. Puneet Sachdev Enrollment No.: 18BSP2012
 SIP PROPOSED

• As part of my SIP, I am working with Ernst and Young Global Limited for a period of 14 weeks
starting from “February 19’2019 till May 24’2019”.
• The main purpose of the project is to “A Study into the financial scenarios and various
other aspects related to selected companies – Pre and Post mergers and
acquisitions”
ABOUT THE SIP COMPANY

• Ernst & Young (doing business as EY) is a multinational professional services firm
headquartered in London, England, United Kingdom
• Founded in 1989; 30 years ago (through the merger of Ernst & Whinney and Arthur Young &
Co. Oldest component from 1849)
• It provides its services in assurance, tax advisory, consulting, financial advisory and legal.
• Each EY member country is organized as part of one of the following four areas:
• EMEIA: Europe, Middle East, India and Africa; Americas; Asia-Pacific and Japan
• Each area has an identical business structure and a management team, which is led by an Area
Managing Partner who is part of the Global Executive board.
 WHAT IS MERGERS AND
ACQUISITIONS ?
• Merger: A merger occurs when two separate entities combine forces to create a new, joint
organization with a new ownership and management structure
• Acquisition: An acquisition refers to the takeover of one entity by another.
• An acquisition could either be friendly or hostile.
• Synergy is often cited as the force that allows for enhanced cost efficiencies of the new
business and a reason to justify the transaction. Synergy takes the form of revenue
enhancement and cost savings.
• Acquirer: The firm which is purchasing a company in an acquisition.
• Target: The firm which the acquirer is targeting to purchase
 OBJECTIVE OF THE SIP

• To understand carefully, the various terminologies related to mergers and acquisitions

• To study the major reasons and motives behind mergers and acquisitions
• Modes of financing mergers and acquisitions
• To identify the lifecycle of mergers and acquisitions
• To study various types of mergers and acquisitions
• To learn in brief about the due diligence process at the time of merger and acquisitions
• To analyse various synergies generated post the merger and acquisition
• To study the operating performance and shareholder value of the companies and comparing
their performance before and after the merger
 METHODOLOGY

• The following sources of information will be used to study about the various concepts and the
financial scenario of the companies before and after the merger and acquisition took place:

Primary Sources:
• Discussion with the company guide and team members

Secondary Sources:
• Internet
• Financial Reports
• News articles
 METHODOLOGY

Secondary Sources:
• Company web portals
• Report publishing websites like morereports.com
• Case studies from IBS center for management research
• Financial websites like Bloomberg, moneycontrol, etc.
• Research websites like Emkay, Motilal oswal, etc.
• EY company websites and EY publishing
 LIMITATIONS OF THE STUDY

• Relevant data is likely to be confidential and private, hence it may not be shared with the
interns
• May not be a part of live engagement of a complete M&A project as information could not be
shared with interns
• Time duration for gaining in-depth knowledge of the whole M&A process is not enough as the
completion of any merger and acquisition may take up to 3 years
 KEY DELIVERABLES

• Analysing various mergers and acquisitions undertaken in the recent past

• Studying the influence of mergers and acquisitions deals on the shareholding pattern of the
new entity
• Studying the impact of mergers and acquisitions on the company’s EPS, EBIT, Sales and Revenue
etc
• Finding out the modes of purchase for the merger and acquisition and the purchase value paid
by the acquiring company
• Understanding the needs for merger and acquisitions
 KEY DELIVERABLES

• Performing ratio analysis

• Studying reasons behind the failure of some mergers
• At the end of my SIP, I would be presenting my study of 10 selected major M&A deals that
happened during the last 2 years, to my company guide
 CONTRIBUTION TO THE COMPANY

• The analysis of my deals are going to help the organisation in their future mergers and
acquisition projects
• When they have to make a proposal to their clients the consultants had to do analysis of the
industry, sector and the companies involve in those industries and their they can use my
analysis of the deals
 KEY LEARNINGS

• What is mergers and acquisitions

• What are synergies
• What can be the possible motives behind mergers and acquisitions
• Various types of mergers and acquisitions
• Steps involved in the process of mergers and acquisitions
• Studying the impact of M&A deals on shareholding pattern and the operating performance of
the company
• Discipline
• Team work
 KEY FINDINGS
DEAL FINDINGS
WALMART-FLIPKART • Mode of entry
• Compete with Amazon
• Flipkart excellent logistic arm
• Cheaper access to professionals and labour
VODAFONE-IDEA • Increase in subscriber base, revenue market share, customer market share
• Scale efficiencies with channel and service partners
• Rationalization of combined marketing costs , general and administrative expenses
• Longer-term IT savings
UPL-ARYSTA • Economies of scale: Creating a top-5 player in Agricultural solutions market
• Highly diversified across crops and geographies
• Exposure to an attractive mix of high value and high growth businesses
• Best-in-class manufacturing capabilities
• Highly complementary capabilities will help drive New UPL’s strategy
• Significant run-rate synergies estimated to be US$200mn
 KEY FINDINGS
DEAL FINDINGS
PVR-SPI • PVR the seventh-largest multiplex chain in the world
• Increase south India’s share in PVR’s overall screen portfolio from 26% to 35%
• At present, PVR has 47 screens across Tamil Nadu, which will go up to 89 post
the acquisition
• Box office revenue from regional films for PVR will increase from 19% to 22%

ONGC-HPCL • Reduced volatility of earnings

• Larger balance sheet would help HPCL fund larger projects
• ONGC's expertise in petrochemical would help in executing future projects of
HPCL
• Better equipped to take larger E&P projects overseas
• Decrease in occupational and maintenance cost
• Make ONGC the third largest refiner in the country
 KEY FINDINGS
DEAL FINDINGS
INDUSIND BANK-BFIL • Lower cost of funds for BFI
• Expand its rural distribution
• Merged Entity to have 4,000+ branches and outlets
• According to analysts, about 60 per cent of BFI’s loan portfolio can be sold to
other banks to earn a fee.

HUL-GSK • Scale efficiencies in areas such as advertising

• Overhead and administration cost efficiencies
• Operation improvement and supply chain opportunities
• Distribution network optimization
• Drive penetration
• HUL’s food and refreshment business will grow
 KEY FINDINGS
DEAL FINDINGS
FLIPKART-EBAY • Market Consolidation
• Technology and market expertise
• Access to eBay’s global inventory
• Scale efficiencies in logistics
• Huge Customer base

AXIS BANK- • Freecharge will help entrench Axis in the digital payments landscape
FREECHARGE • Enhances reach in a new customer segment
• And creates a platform for digital distribution
• Leapfrogs Axis’s digital journey by multiple years and
• Become a Fin-tech company backed by the strength of a Bank

AIRTEL-TTSL • Operators that had less market share were unable to withstand Jio’s onslaught
and a wave of mergers and acquisitions started in the telecom industry.
• Airtel acquired Tata’s CMB and this acquisition helped Airtel to boost its
subscriber base to hold its position.
 SCHEDULE

Week 10-12:
• Carrying out full comparative analysis of any 2 M&A deals from the year 2013 or 2014
• Perform ratio analysis and
• Study in brief about Indian and Global M&A trends

Week 13-14:
• Study the role of the Ernst and Young team in the M&A deals and
• Last week submission of the report and deals presentation to the company guide
 CONCLUSION
Mergers and Acquisitions plays important role in corporate restructuring and development of the
country. In India it is playing same role. And after liberalization it increased due to liberal
government policies. M&A are a significant business strategy today for corporates.
The main objectives behind any M&A transaction, for corporate today is:
• To improve revenues and profitability
• Faster growth in scale and quicker access to market
• Competition in globalized market
The most important factors according to corporate India that contribute to the success of any
M&A transaction are:
• Timing
• Due diligence
• Personnel
• Advisors on legal, policy and financial strategies
THANK YOU…