Mergers, Acquisitons and Corporate Restructuring

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Recommended: Theory of automobile industries

Mergers Acquisitions & Corporate Restructuring – Project Report

Executive Summary

Mahindra & Mahindra Ltd. (M&M), of the $16.2 billion Mahindra group, entered into an agreement with the ailing Ssangyong Motor Company (SYMC) to acquire a majority stake on 2nd August 2010. The deal was done to allow Ssangyong Motor Company to strengthen their Research & Development, increase business competitiveness, and encourage investments in product development and to increase their global sales with the help of a partner (Mahindra & Mahindra) with strong financial capability and business engagements in diverse markets. M&M’s plan was to back Ssangyong’s strong technological capability with its competence in sourcing and marketing strategy in order to emerge as a competitive global Utility Vehicle player by leveraging the synergies attained and investing a new product portfolio for Ssangyong.

This paper attempts to critically analyze the acquisition deal between M&M and Ssangyong Motor Company (SYMC).This paper studies about the history of both the companies and the situations which led to the deal. Paper attempts to value SYMC using DCF methodology and value the synergies which were expected from the deal. It is found from the analysis that the decision to go ahead with the acquisition was correct and the amount paid for buying the stake is justifiable.

Key Words: M&M- Ssangyong Deal, Mergers&Acquisitions, DCF valuation, Valuing Synergies

Table of Contents

Introduction ………………………………………………………………

Company History ………………………………………………………………

Deal Analysis ………………………………………………………………

Valuation ………………………………………………………………

Post Acquisition Scenario ………………………………………………………………

References ………………………………………………………………

In...

... middle of paper ...

...d by 18% Demand slowdown in China and Korea can be overcome by improving product portfolio in India

Table 1: Benefits of the companies post acquisition Source: Team Analysis

REFERENCES

“Damodaran On Valuation”, Second Edition, Wiley India

http://www.rediff.com/business/slide-show/slide-show-1-auto-how-mahindra--mahindra-turned-around-ssangyong/20130627.htm#4

http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/mm-to-pay-rs-2105-crore-to-acquire-70-in-ssangyong/articleshow/6973570.cms

http://en.wikipedia.org/wiki/SsangYong_Motor_Company

http://www.dhruvacollege.net/images/stories/vidwat/vidwat%20journal%20vol%204%20iss%202.pdf

http://economictimes.indiatimes.com/fullcover.cms?keyword=Mahindra-SsangYong%20Deal

http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=003620:KS

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