8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 1/11

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 2/11

Merger and Acquisition tren

Mergers and Acquisitions (M&A) are very common in Indian

corporate world.

The use of electronic Initial Public Offer (IPO) is being planned

by the Securities and Exchange Board (SEBI) in India. ReserveBank of India has relaxed Foreign Investments in

pharmaceutical field.

In 2011 Merger and Acquisition deals saw a decline in India

however growth was seen in India’s energy, mining and utiliti

sector. A major setback was seen the telecommunication sectin India and it had a decrease in M&A deals in 2011

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 3/11

THE ACQUISITION

(MAHINDRA & MAHINDRA ACQUIRES SYMC)

Aug 7 -Mahindra board approves SYMC bid

Aug 12  –Mahindra selected as preferred bidder

Aug 23 –

Mahindra signs MoUNov 23  –Deal Formally Signed

Jan 28-Formal consent from secured & unsecured creditors

Feb 1 –Approval from courts

Feb 9 –Formal share Allotment

Mahindra, the preferred bidder for SsangYong in August 2010, holds a 70 per centstake in SYMC, $463 million.

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 4/11

Headquartered in Mumbai

Ranked 21st in fortune 500 India.

It in the automotive industry, aerospace, agriculture, defense, energy, ins

finance, real estate, retail, steel, logistics, etc.

A US $7.1 billion multinational group

Employs more than 112,000 people in over 79 countries.

Sole Indian automobile manufacturer to feature in the top 10 list of the Ca

Disclosure Leadership Index in India - 2010.

BRIEF ABOUT THE COMPANIE

Mahindra and Mahindra ltd

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 5/11

SsangYong, established in 1954 in Korea

Manufacturer of High End automobiles in the segments of Sports Utilit

(SUV) and Recreational Vehicles (RV)It created a new line of a 4 wheel Drive (4WD) SUV, the Korando Famil

also the first ever SUV Manufactured in Korea

Known for leadership, innovation and quality

SsangYong

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 6/11

RATIONALECompany Competency

Mahindra Cost effective Sourcing, Marketing, Financially sound, low-end pro

Ssangyong Technology and R&D, Exports to approx.35 countries, High-end pr

M&M has a low cost sourcing advantage from India, not to overlook Global economies of scale.Sharing of distribution channels, production platforms and powertrains should minimize cost of pthe supply chain.SYMC R&D and infrastructure will act as a powerful synergy with M&M's R&D. Joint R&D prograproduct development.This coupled with the company lifecycle experience accrued over 40 years by SYMC will enhanmanagement.SYMC had in-house engine development which can supplement M&M's engine development ab

Changes in ownership and financial crisis lead SYMC to receivership. With M&M acquiring SYMbenefit was to make SYMC debt  – free..

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 7/11

Access to new product Portfolio

SsangYong brings with it a rich legacy of R&D

Technical know-how

Ssangyong’s distribution and marketing network in Western Europ

America etc.

Operational synergiesM&M also is benefiting on its corporate level by considering settin

Finance operations in Korea to enhance the sales volum

BENEFITS TO M&M

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 8/11

VALUATIONCALCULATION OF FAIR VALUE OF SSANGYONG

DCF

In KRW million 2009 2010 2011 2012

Free Cash Flow 157,859 107,195 94,625 28,265

Pv of FCF 140,032.82 84352.03 66052.21 17502.13

Risk free rate of South Korea (average 1994-2013) = 3.65%Expected ROE = 12.73%Hence,Rs = 12.73%

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 9/11

Mahindra and Mahindra acquired 70% stake in Ssangyong Moto

2,100 crore, including bonds in November 2010.

This is one of the largest out bound deals struck by M&

This deal came to Ssangyong as a debt relief program as post theit became debt free.

The price that Mahindra and Mahindra paid was to the tune of $

and in the form of cash and shares; which was about 60 percen

SAIC’s acquisition of Ssangyong earlier in 2004.

Method of payment

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 10/11

There is an obvious growth pattern for M&M following since the acquisition which reflects that the syworking as expected

. Mahindra gets its maximum benefits from its approach to higher-end SUVs, R&D capabilities andnetwork particularly in European and South East Asian continents.

.

$200 million was infused by M&M in equity that helped Ssangyong to reduce their liabilities from Rs 3,550 crore

The labor problem was also solved due to a firm management by M&M

Ssangyong would be helped my Mahindra & Mahindra to trade its commodities

Conclusion

8/10/2019 Mahindra & mahindra Acquires SSanYong

http://slidepdf.com/reader/full/mahindra-mahindra-acquires-ssanyong 11/11